A coalition of 18 U.S. states has filed a lawsuit against the Securities and Exchange Commission (SEC), accusing the federal agency of attempting to “unilaterally wrest regulatory authority away from the States” in the realm of cryptocurrency oversight. The states, led by Kentucky Attorney General Russell Coleman, aim to halt the SEC’s enforcement actions, arguing that state governments should have the right to regulate crypto instead. The DeFi Education Fund, a lobbying group, is also named as a plaintiff in the case.
The lawsuit directly names controversial SEC Chair Gary Gensler and several SEC commissioners. Gensler has faced significant criticism from the crypto industry and politicians, including president-elect Donald Trump, for his stringent regulatory approach. The conflict over crypto regulation has been a longstanding battle, primarily between the SEC and the Commodities Futures Trading Commission (CFTC), which is favored by the crypto industry as a more lenient regulator.
Despite the criticism, Gensler’s SEC has won several legal battles against the crypto sector. Judges have consistently ruled that the SEC has jurisdiction over certain digital assets, considering them investment contracts under federal securities laws. The lawsuit from the states claims otherwise, arguing, “The digital assets implicated here are just that — assets, not investment contracts covered by federal securities laws.”
The states also invoke the major questions doctrine, arguing that the SEC needs Congressional approval to pursue regulatory actions against the crypto industry. However, this argument has faced judicial pushback in past cases involving Coinbase and Terraform Labs, where judges ruled in favor of the SEC’s authority to classify and regulate digital assets as securities.
News Source:Theverge，This article does not represent our position.
