Republican state attorney generals and the DeFi Education Fund sued the United States Securities and Exchange Commission (SEC) and its five commissioners.
The lawsuit filed on Thursday claims that the SEC overstepped its bounds in its enforcement actions against the cryptocurrency industry. The suit asks for a federal judge to block the regulator from further enforcement actions, claiming that “the SEC’s ‘crypto policy’ is ‘unlawful executive action'” that violated the Administrative Procedures Act.
The claims
The lawsuit heavily criticizes the actions taken by the United States Securities and Exchange Commission against companies operating in the crypto industry. The document reads:
“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 case follows the regulator’s chairman Gary Gensler — believed by many to have been the top enemy of the U.S. crypto industry — alluding to his departure from the role. He said during a recent speech:
“It’s been a great honor to serve with [the SEC staff], doing the people’s work, and ensuring that our capital markets remain the best in the world.”
Gensler was nominated for the role by the Biden administration, and the Trump administration is expected to appoint a far more pro-crypto candidate. Gensler is not obligated to resign, but historical data indicates that the SEC chairman tends to resign during administration change.
The report follows Gensler expressing his strong opposition to the Financial Innovation and Technology for the 21st Century Act, also known as the FIT21 Act back in May. The bill would have created exceptions for decentralized financial applications, which the SEC chairman criticized heavily:
[The legislation] would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”
