Advertisement
SEC in Hot Water: 18 States Sue as Gensler’s Crypto Freeze Backfires
- A torrent of Republican Attorney General lawsuits have come for Gary Gensler and the SEC, with 18 states banding together to launch legal action against the regulatory body.
- The complaint details the overextension of the SEC’s regulatory power.
- The goal of the lawsuit is to hand back control over crypto policy to the individual states, rather than national
enforcementregulatory agencies. - Meanwhile, speaking at a law institute conference, Gensler doubled down on his anti-crypto stance while inferring his time as Chair of the SEC is coming to an end.
Trump has been president of the United States for barely a minute and the wolves are already at Gary Gensler’s door. Eighteen different Republican attorneys have taken aim at the Securities and Exchange Commission (SEC), the US lead financial regulator responsible for some…controversial policies regarding cryptocurrency.
As part of Donald Trump’s presidential campaign, he vowed to reform America’s strained relationship with blockchain technology, a stress heavily influenced by Gensler and co’s “regulation by enforcement” position.
It appears this transition is already underway.
Related: Pro-Crypto Scott Bessent Backed As Trump’s Treasury Pick
SEC Given Taste of Their Own Medicine by Republican Attorneys
The lawsuits came pouring in from Republican Attorney Generals in states across the USA, including Kentucky, Texas, Utah, South Carolina, Florida, Kansas and others.
Generally, the complaint argues that the SEC and Gensler overextended their powers through the past few years – particularly regarding the lawsuits they brought toward XRP and Coinbase.
The ultimate goal of the lawsuit is for the court to rule that a “digital asset transaction is not an investment contract.”
The move comes as Republican states aim to take control of policing the crypto sector out of the hands of the SEC.
While the Gensler-led body has typically been anti-crypto, despite the approval of spot ETFs, the new US Government appears set to introduce progressive digital asset reform. If the SEC meddles in these affairs, it may prove restrictive for Republican states looking to foster innovation.
The Securities and Exchange Commission has not respected this allocation of authority…Instead, without Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority from the States through an ongoing series of enforcement actions targeting the digital asset industry.
Statement from the Complainants
The lawsuit names the SEC and Gary Gensler as defendants.
Gensler Gives Crypto Clip Over the Ear at Annual Conference
Despite getting a taste of their own medicine, Gensler held strong (surprising, huh) when probed on his agency’s hardline crypto stance.
Related: Franklin Templeton Funds Token Effort, Expands $410M to Ethereum Blockchain
Speaking at the Practising Law Institute Conference, Gensler said:
[the focus] has been on some of the 10,000 or so digital assets, many of which courts have ruled were offered or sold as securities
Gary Gensler He also gave crypto a nice little drive-by, because, why not?
[Digital currencies] have caused significant investor harm…the vast majority of crypto assets have yet to prove out sustainable use cases.
Gary Gensler Something tells me the blockchain industry won’t be distraught to see the back of Gensler. But hey, it’s always nice for there to be a villain to unite the community. It just remains to be seen who will take Gensler’s place when he most likely resigns in the coming months.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
