Mike Wawszczak, co-founder of the cryptocurrency trading platform Lejilex, has announced that his company and the Crypto Freedom Alliance of Texas (CFAT) have initiated a lawsuit against the U.S. Securities and Exchange Commission (SEC). The two organizations contend that the SEC, under the leadership of Chair Gary Gensler, has unlawfully imposed its authority over the digital asset industry.
"Today, we at @LEJILEX and the Crypto Freedom Alliance of Texas sued the @SECGov to put an end to its aggressive and unorthodox enforcement actions against our industry," said Wawszczak, according to X. "We are asking the court to recognize the limits of the SEC's authority so law-abiding founders and companies in the crypto space can build the future here in America."
According to CFAT, a nonprofit trade association, the SEC has claimed jurisdiction over most digital asset transactions occurring in Texas and throughout the U.S. However, through this lawsuit, they aim to establish that assets traded on Lejilex's new platform are not securities. In their complaint, Lejilex and CFAT argue that the SEC has "usurped near-total jurisdiction over the digital asset industry," despite several SEC Commissioners acknowledging that Congress has never granted their agency such authority. They further assert that not only does the SEC lack legal authority to regulate these transactions, but it also disregards Congressionally-imposed limits on its jurisdiction and fails to provide clear guidance for the crypto industry. This lack of regulatory clarity leaves crypto companies fearing potential SEC enforcement actions and puts the U.S. behind other nations in terms of digital asset development.
In their complaint, CFAT claims that despite calls from crypto industry participants for definitive regulation providing clear ex ante guidance, the SEC has failed to deliver. To justify its enforcement actions, it argues that nearly all digital assets are securities. However, CFAT and Lejilex counter this claim by arguing that digital assets do not meet criteria qualifying them as securities.
Wawszczak expressed his disappointment at having to file a lawsuit instead of launching their business. He stated: "The SEC’s rogue enforcement actions targeting our industry have paralyzed those of us who just want to build lawful businesses and technologies. Fear of rogue enforcement should not be a thing entrepreneurs are forced to experience. We hope our action encourages the SEC to reconsider its regulatory approach, and we welcome them to work with us and our industry to ensure the most important technologies of the future are built here in America, under American laws, consistent with American values."
According to his LinkedIn profile, Wawszczak is a co-founder of the Fort Worth-based platform Legilex. He serves as general counsel for Alliance DAO and has previously worked as general counsel for Clearbit. He holds a doctorate in law from the University of Michigan Law School.
A recent study conducted by crypto exchange Coinbase found that nearly a quarter of Texas adults own digital assets. Over 60% of survey respondents believe that the traditional financial system favors "powerful interests," while 76% think that cryptocurrency has the potential to increase economic opportunities currently inaccessible through conventional systems. Seventy-four percent of respondents indicated they would be more likely to vote for candidates who recognize the importance of supporting domestic crypto industries in future elections.