Facing concerns of overreach and potential disruption to the crypto sector’s future in the U.S., Crypto.com took legal action against the U.S. Securities and Exchange Commission (SEC) on Tuesday.

In August, the SEC issued a notice to the company, signaling its intention to prosecute the crypto platform—a formal warning that preceded the current lawsuit.

Crypto.com’s legal challenge highlights allegations that the SEC has expanded its authority beyond its legal framework, specifically by treating most cryptocurrency interactions as securities-related activities.

Crypto.com, in its legal filing, asserts its mission to impede what it considers the SEC’s unauthorized maneuvers against the digital currency domain.

In recent developments within the crypto regulatory landscape, companies have increasingly engaged in legal battles. For instance, the global cryptocurrency market is valued at over $2 trillion, with the U.S. being one of the leading players in this space. Given such statistics, regulatory clarity becomes crucial to sustain growth and innovation in the sector.

The lawsuit also argues that the SEC ignored vital procedural requirements, such as the notice-and-comment rulemaking stipulations under the Administrative Procedure Act.

Moreover, Crypto.com lodged a petition earlier in the year following the receipt of a Wells Notice, similar to the preemptive lawsuit filed by Consensys to challenge the SEC’s actions.