- 18 US states file lawsuit against SEC and Gary Gensler
- The states accuse SEC of overreaching regulatory authority over crypto industry
- The lawsuit alleges SEC’s actions against crypto firms have cost them $426 million collectively
A coalition of 18 US states recently filed a lawsuit against the Securities and Exchange Commission (SEC) and its chairman, Gary Gensler. The states are accusing the SEC of overstepping its authority in regulating the crypto industry.
The Lawsuit Against the SEC
The plaintiffs in the lawsuit include Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, and more. The complaint alleges that the SEC has tried to take over crypto regulation from states without authorization from Congress.
According to the Blockchain Association, the SEC’s enforcement actions against crypto firms have cost the industry over $400 million in legal fees. Crypto companies have struggled under the SEC’s lack of clear guidance on digital asset regulation.
The SEC’s Stance on Crypto
Under Gensler, the SEC has taken an aggressive stance against the crypto industry. Gensler views most cryptocurrencies as unregistered securities that fall under the SEC’s jurisdiction. This differs from the previous SEC chairman’s view that Bitcoin and Ethereum are not securities.
Gensler has said that platforms operating as crypto exchanges must register with the SEC. He also believes stablecoins fall within the SEC’s authority. His views have prompted pushback from the crypto industry and states that want jurisdiction over digital asset regulation.
The Battle Over Crypto Oversight
The states’ lawsuit against the SEC reflects the ongoing battle over crypto oversight between federal regulators and state governments. The outcome of the case could determine whether states or the SEC have primacy in regulating cryptocurrencies. For now, the crypto industry remains stuck in regulatory limbo.
Conclusion
The SEC faces growing resistance from states and crypto firms over its expansive view of its authority. However, Gensler believes tighter regulation is needed to protect crypto investors and maintain fair markets. The lawsuit by 18 states represents the latest skirmish in the clash between regulators and the crypto industry.
