Connect with us

Hi, what are you looking for?

Editor's Pick

Texas Crypto Firm Lejilex Sues SEC Following Overstretched Securities Classification

Texas-based cryptocurrency firm Lejilex has filed a lawsuit against the Securities and Exchange Commission (SEC) over securities labels on cryptocurrency assets.

The lawsuit filed on Feb 21 in a federal court in Fort Worth challenges the SEC’s jurisdiction in several actions affecting its business last year.

So this is huge. Today, @LEJILEX and the Crypto Freedom Alliance of Texas (CFAT) sued the SEC seeking a declaration that “secondary-market sales of digital assets like the ones that LEJILEX intends to facilitate through the https://t.co/FrN5OiTwYN are not sales of securities.”…

— Amanda Tuminelli (@amandatums) February 21, 2024

Last year, the company sought to create a cryptocurrency exchange and offer trading services around assets flagged by the SEC. The exchange was to list digital assets which had been classified as securities by the regulator.

The financial regulator increased pressure on the market in 2023, citing investor protection concerns in an attempt to rid the sector of bad actors.

As cryptocurrency fraud and scams surged, the SEC increased pressure by declaring some assets as securities, effectively putting them under its jurisdiction.

According to the regulator, this was done to impose the same level of scrutiny and criteria on those assets to avoid possible investor losses.

As a result, the SEC filed charges against Binance and Coinbase for offering trading services to unregulated securities.

Crypto Freedom Alliance of Texas Stands With Lejilex

Lejilax, alongside the Crypto Freedom Alliance of Texas (CFAT), filed a lawsuit against the SEC, claiming an extension of the regulator’s powers. The CFAT, a group that advocates for fair and responsible crypto policies, comprises big industry players like Coinbase and a16z crypto fund.

Both parties argue that the SEC lacks a clear mandate to oversee crypto regulations and states that listing pre-existing tokens does not breach securities laws.

“The SEC not only lacks the legal authority to regulate most digital asset transactions but has proven it is unprepared to respect the limits Congress has put on its jurisdiction or even to develop and enforce common sense and consistent regulations for this emerging industry, relying instead on regulation via ad hoc enforcement actions.”

Mike Wawszczak, a Lejilex co-founder, encapsulated the slowdown of the company’s business due to the Commision’s regulation.

“We wish we were launching our business instead of filing a lawsuit but here we are,” he wrote.

No Investment Contract Between Parties

For Legilex, the classification of crypto assets as investment contracts is a stretch because there is no long-term commitment between sellers and the purchasers to manage a common venture for the purchaser’s benefit.

“The SEC’s rogue enforcement actions targeting our industry have paralyzed those of us who just want to build lawful businesses and technologies. Fear of rogue enforcement should not be a thing entrepreneurs are forced to experience. We hope our action encourages the SEC to reconsider its regulatory approach…”

Last year, Coinbase made several efforts to seek regulatory clarity in the United States, urging the SEC to change its approach. Several executives also highlighted migration concerns as a result of harsh policies taken by regulators in the country.

The post Texas Crypto Firm Lejilex Sues SEC Following Overstretched Securities Classification appeared first on Cryptonews.

You May Also Like

Editor's Pick

As decentralized naming systems gain traction, Ethereum Name Service has seen ENS price double, leaving some FOMO investors asking is it too late to...

Economy

How can Forex crash? Forex market crash history Fact that the Forex is one of the most volatile and most profitable markets in the...

Editor's Pick

Colorado-based pastor Eligio “Eli” Regalado and his wife, Kaitlyn, are facing legal action after allegedly defrauding investors of millions of dollars through the sale...

Stock

Enthusiasm is needed to drive an uptrend, but sometimes enthusiasm can go too far. That is why technical analysts like to use various sentiment...

Disclaimer: happyretirementstories.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


Copyright © 2024 happyretirementstories.com