Eighteen Republican states attorneys general have filed a lawsuit against the SEC, accusing it of unconstitutional overreach in its crypto regulations.
Republican States Sue SEC
A joint lawsuit has been filed by Republican Attorney Generals from 18 US states against the Securities and Exchange Commission (SEC), its commissioners, and Chair Gary Gensler to address the regulator’s management of cryptocurrency.
The lawsuit alleges that the SEC exceeded its constitutional authority by implementing stringent regulatory measures against the cryptocurrency industry.
The coalition, which is led by Kentucky, Texas, Florida, and Nebraska, as well as DeFi Education Fund, is seeking declaratory and injunctive relief for the “unconstitutional persecution” of the crypto sector.
Tennessee, West Virginia, Iowa, Texas, Mississippi, Montana, Arkansas, Ohio, Kansas, Missouri, Indiana, Utah, Louisiana, South Carolina, and Oklahoma are among the other states that are members of the coalition.
The lawsuit emphasizes state initiatives such as licensing, taxation frameworks, and the establishment of “laboratories for experimentation.” However, it asserts that the SEC’s actions violate the separation of powers by imposing federal mandates without Congressional sanction.
Additionally, the lawsuit criticizes the SEC for disregarding state initiatives in its attempt to establish a federal regulatory framework for digital assets without the requisite Congressional authorization.
The plaintiffs contend that the constitutionally mandated separation of powers is undermined by the SEC’s alleged centralization of regulatory power through the enforcement of these rules through multiple legal actions.
The lawsuit seeks judicial intervention to reaffirm state authority over crypto regulation and prevent further SEC encroachment.
Gensler recently teased the industry about his prospective resignation in what appears to be a farewell message, as he was under increased pressure.
In a speech titled “Car Keys, Football, and Effective Administration” delivered at the 56th Annual Institute on Securities Regulation and the Practicing Law Institute, Gensler addressed a variety of SEC topics, such as markets, governance, accounting, crypto, and even football.
