CFAT and digital asset company Lejilex have filed a lawsuit against the US Securities and Exchange Commission (SEC), asking the court to make a decision on the status of digital assets sold in the secondary market.

CFAT and Lejilex, where it is reported that Mike Wawszczak, who is a lawyer and the general counsel of Alliance DAO, plans to launch a crypto exchange called Legit.Exchange, filed a lawsuit against the SEC on February 21 in the North Texas District Court in Fort Worth, according to his LinkedIn profile.

The lawsuit presents a claim against the SEC with the Declaratory Judgment Act and a case shown as an example in 2007. The plaintiffs are asking the court for several decisions, among them:

“a. Declare that secondary market sales of digital assets, as Lejilex plans to facilitate through the Legit.Exchange, are not securities sales as defined in the 1934 Securities Exchange Act and 1933 Securities Act.”

Legit.Exchange (SEC)

They also want the court to declare that Legit.Exchange is not an unregistered securities exchange and Lejilex will not be an unregistered broker or clearinghouse by operating the exchange.

The plaintiffs argued that “the SEC’s recent punitive actions have adopted a new and original position that ‘investment contracts’ include almost all digital asset transactions under federal securities laws.”

Following, they said, “This position leaves law-abiding participants in the digital asset industry at risk of exposure to the SEC’s punishment actions for not conforming to the SEC’s exaggerated understanding of its authority.” The complaint continued:

“Despite the continuous pleas of industry participants, the SEC has refrained from publishing any specific regulation explaining its new position, which would force the agency to test it by forming the rule of awareness and comment.”

Lejilex described Legit.Exchange

Lejilex described Legit.Exchange as a digital asset trading platform that does not have a customer account. It uses smart contracts to allow users to trade with each other. Users will never know each other’s identities. Lejilex will control which assets are allowed to trade and perform functions such as verification for a fee, but will not store user assets. The company’s website stated that it plans to launch Legit.Exchange by the end of the year.

According to Lejilex’s website, the company was established in 2023. The (X) renamed asset (previously named Twitter) dates back to September. CFAT was also established in September. Other supporters of the nonprofit organization include a16z crypto, Coinbase, Ledger, Bain Capital Crypto, Blockchain Capital, and Paradigm.

The lawsuit addressed the Howey test in detail. It also made references to the Wahi lawsuit and the SEC’s actions against LBRY, Binance, and many other companies.

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Polymer Labs said on Tuesday that the round was led by Blockchain Capital, Maven 11, and Distributed Global, with participation from Coinbase Ventures, Placeholder, Digital Currency Group, North Island Ventures, and Figment Capital.

It is unclear when Polymer started raising for the round or when the project closed. Co-founder Peter Kim declined to comment on the timeline. He also declined to comment on the structure of the round, whether it was equity, token, or equity plus token-warrant round, and valuation.

Polymer’s Series A seed round occurred two years ago, raising $3.6 million. Kim said the project is in the development phase of its Ethereum composability infrastructure and plans to launch the Testnet in about 2 months.

Ethereum Interoperability Hub

Polymer Labs is building an “Ethereum interoperability hub” to connect all blockchains, starting with Ethereum, with the goal of creating the next generation of the internet.

Polymer noted that existing Layer 2 networks and interoperability token bridges are widely used but not robust against attacks, adding that the Layer 2 aggregation will enable protocols on different chains to “communicate efficiently and securely, improving their functionality without introducing new trust assumptions.”

The company is using the centrally managed Cross-Chain Communication protocol, the Cosmos standard for blockchain interoperability, and the Optimism Stack.

Polymer said that eventually, any developer building any Web3 application on any chain will be able to use the interoperability tool.

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