Lejilex vs. SEC - are crypto transactions securities?

[pmbug]

I mentioned this lawsuit in the War on Crypto thread. This thread is for comments and news on the lawsuit.

...
On Wednesday, a new crypto trading platform called Lejilex filed a lawsuit against the SEC in a federal court in Texas alongside its trade association, the Crypto Freedom Alliance of Texas. In the lawsuit, Lejilex argues that secondary market sales of digital assets do not constitute securities transactions and thus fall outside the scope of the SEC’s jurisdiction.

The argument is similar to one Coinbase is making against the SEC in its enforcement action in federal court in New York, and it closely tracks industry lawyers’ prevailing views on how the securities laws apply to crypto.

The Lejilex lawsuit is a perfect example of “impact litigation” — the practice of bringing strategic lawsuits in court that present well-considered legal questions, with the goal of achieving lasting effects beyond the case itself.
...
Impact litigation is particularly useful when the following are true: (1) the executive branch and its agencies are misinterpreting the law; (2) the legislature is moving too slowly to correct the executive’s error; and (3) the judiciary has the interpretive tools to get the law right.

All three are unequivocally true for the crypto industry. As Lejilex explains in its complaint, and as Coinbase argued in its motion for judgment on the pleadings, the SEC misinterprets whether and how existing law applies to digital assets. Congress is making progress on new legislation specific to crypto, but it’s hard to imagine House Republicans and Senate Democrats reaching consensus during an election year — and even harder to predict what will happen in 2025 and beyond. Meanwhile, the courts are embracing interpretive tools like the major questions doctrine to strike down regulations that lack clear congressional authorization.
...

https://www.coindesk.com/consensus-magazine/2024/02/23/in-lejilex-vs-sec-crypto-goes-on-offense-in-the-courts/