Texas Bitcoin mining firm sues SEC for overreach on crypto

A Texas crypto firm and industry group sued the SEC, disputing its authority over exchange-traded crypto, aiming to classify them as non-securities.

In a legal maneuver against the U.S. Securities and Exchange Commission (SEC), a Texas-based crypto mining firm called Lejilex and the Crypto Freedom Alliance of Texas (CFAT) initiated legal action, Reuters reports, citing the lawsuit.

Both are challenging the SEC’s purported authority in the crypto domain, contending that the regulatory body lacks a definitive legal mandate. Lejilex aims to establish Legit.Exchange, a crypto trading platform, intending to list tokens, including those previously designated by the watchdog as securities, in lawsuits against Coinbase and Binance.

Lejilex co-founder Mike Wawszczak expressed regret at resorting to legal action, saying the firm wanted to launch its business “instead of filing a lawsuit, but here we are.” Both Lejilex and CFAT challenge the SEC’s classification of cryptocurrencies as investment contracts, saying that such assets lack the ongoing commitments typically associated with securities.

In June 2023, the SEC sued Coinbase and Binance, saying multiple tokens listed on them, including Solana (SOL), Cardano (ADA), Filecoin (FIL), and others, were securities. Binance denied the allegations, adding that the SEC’s actions were more of an attempt to show judicial power over other regulatory bodies than concern for investor protection.