Texas-Based Crypto Miner Lejilex Takes SEC to Court Over Exchange-Traded Crypto

A legal battle has unfolded as a Texas-based cryptocurrency mining company, Lejilex, along with the Crypto Freedom Alliance of Texas (CFAT), took the U.S. Securities and Exchange Commission (SEC) to court. The core of the dispute lies in the contention over the SEC’s jurisdiction and regulatory authority in the realm of exchange-traded cryptocurrencies. This lawsuit, as reported by Reuters, aims to challenge the SEC’s stance and seeks to categorize these digital assets as non-securities.

Lejilex, alongside CFAT, argues that the SEC does not have a clear legal basis to regulate certain crypto assets in the way it currently attempts to. The Texas firm is in the process of launching Legit.Exchange, a cryptocurrency trading platform. This platform plans to feature tokens, some of which the SEC has previously identified as securities in legal actions against prominent exchanges like Coinbase and Binance.

Mike Wawszczak, a co-founder of Lejilex, expressed disappointment over having to pursue legal action, stating, “instead of filing a lawsuit, but here we are.” He highlighted the company’s preference for focusing on business development rather than litigation. The lawsuit challenges the SEC’s approach to defining cryptocurrencies as investment contracts, pointing out that these digital assets do not embody the continuous obligations that are characteristic of securities.

This legal confrontation comes in the wake of the SEC’s June 2023 lawsuits against Coinbase and Binance. The SEC’s allegations included the claim that several tokens available on these platforms, such as Solana (SOL), Cardano (ADA), and Filecoin (FIL), qualify as securities. Binance responded to these allegations by denying them and suggested that the SEC’s actions seemed more inclined towards asserting dominance over other regulatory entities rather than safeguarding investor interests.