18 States Unite Against SEC: A Bold Challenge to Cryptocurrency Regulation

As of November 15th, recent reports reveal that a collective of 18 states in the U.S. has initiated legal proceedings against the U.S. Securities and Exchange Commission (SEC). This action, led by Republican state attorneys general, underscores allegations of unconstitutional regulatory practices under the stewardship of Chairman Gary Gensler. The lawsuit asserts that the SEC’s rigorous enforcement actions threaten the burgeoning $3 trillion crypto industry while encroaching upon state-level regulatory privileges.

Nebraska Attorney General Mike Hilgers has expressed that Nebraska, alongside Kentucky, spearheads this multi-state litigation, contesting the current administration’s broad measures governing cryptocurrency. The legal challenge, lodged in the U.S. District Court for the Eastern District of Kentucky, accuses the SEC of overreaching its congressional mandate by misclassifying cryptocurrencies as investment contracts, akin to traditional securities.

With several states asserting their regulatory authority over digital assets, the lawsuit seeks a judicial declaration affirming that digital asset transactions do not fall under the definition of investment contracts. Furthermore, it requests constraints on the SEC, urging the agency to refrain from future legal actions against non-registered digital asset platforms.