Republican State AGs and DeFi Lobby Sue SEC Over Crypto Enforcement Actions

Policy Election 2024 Republican State AGs and DeFi Lobby Sue SEC Over Crypto Enforcement Actions The suit wants a court to block the SEC from suing crypto exchanges moving forward. By Nikhilesh De Nov 15, 2024 at 12:08 a.m. UTC Election 2024 coverage presented by Stand with crypto SEC Chair Gary Gensler (Nikhilesh De/CoinDesk) A group of state attorneys general and the DeFi Education Fund filed a lawsuit against the U.S. Securities and Exchange Commission and its five commissioners alleging the regulatory agency was overstepping its bounds in bringing enforcement actions against crypto exchanges. The lawsuit , filed Thursday afternoon in the U.S. District Court for the Eastern District of Kentucky, asks a federal judge to block the SEC from bringing enforcement actions, arguing "the SEC's 'crypto policy' is 'unlawful executive action'" and that it violated the Administrative Procedures Act. Unmute Web3 Games Funding Stabilizing at $1B in 2024 05:50 Trump Announces Department of Government Efficiency, DOGE Skyrockets 01:45 Bitcoin Tops $93K Lifetime High As U.S. Demand Surges 01:29 DOGE Ascends Over 100% in Past Week, Traders Set $1 Price Target 02:47 Bitcoin Nears $90K; FTX Sues Binance, CZ For $1.8B "The SEC’s sweeping assertion of regulatory jurisdiction is untenable. The digital assets implicated here are just that — assets, not investment contracts covered by federal securities laws," the lawsuit said. The SEC's approach to crypto is encroaching upon states' rights to police the industry on their own, the suit argued. The suit also pointed to the major questions doctrine, a Supreme Court precedent that says federal agencies shouldn't litigate issues not directly assigned to them by Congress. Other federal courts have rejected the major questions doctrine's application to SEC lawsuits against crypto companies. Miller Whitehouse-Levine, the chief executive officer of DEF, said in a statement that the suit was targeting SEC "overreach." "DeFi, and crypto broadly, promises to make financial services and the digital economy more accessible, efficient, interoperable, dependable, and consumer-focused," he said. "The SEC currently stands as a barrier to realizing this promise." An SEC spokesperson said, "We don’t comment on litigation. State securities regulators have been strong partners in efforts to uncover and prosecute misconduct in the crypto markets." Earlier Thursday, Chair Gary Gensler spoke briefly about the SEC's approach to crypto, saying it followed in the footsteps of his predecessor, the Donald Trump-appointed Jay Clayton's commission. "This is a field in which over the years there has been significant investor harm," Gensler said. "Further, aside from speculative investing and possible use for illicit activities, the vast majority of crypto assets have yet to prove out sustainable use cases." Kentucky Attorney General Russell Coleman said the suit was aiming to "keep the federal government from reaching into Kentuckians' wallets." “Kentuckians of all ages and backgrounds are eager to access crypto to assert their financial freedom and guard against historic inflation," he said. "Instead of encouraging this vibrant new digital industry, the Biden-Harris Administration is unlawfully cracking down on cryptocurrency." Read more: Ex-SEC Lawyers Agree: Crypto Enforcement Shackles May Take Time to Resolve Edited by Marc Hochstein. Disclosure Please note that our privacy policy , terms of use , cookies , and do not sell my personal information have been updated . CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies . CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one. Nikhilesh De Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether. Follow @ nikhileshde on Twitter Read more about Regulations SEC DeFi Education Fund lawsuits