Crypto Platform Sues SEC, Seeking Clarity on Secondary Market Rules
• SEC has taken an increasingly hostile stance toward the crypto industry in recent years, relying on regulation by enforcement rather than providing a path to compliance
• Many crypto companies feel like "sitting ducks", afraid to operate in the US due to threat of SEC enforcement action
• This week, new crypto trading platform Lejilex filed a lawsuit against the SEC arguing that crypto secondary market sales fall outside SEC jurisdiction
• Lawsuit is an example of "impact litigation" - bringing strategic lawsuits to achieve policy changes beyond the case itself
• Impact litigation can be effective when executive branch misinterprets law, legislature moves slowly, and judiciary has tools to interpret law correctly - all true for crypto industry