Eighteen U.S. states have initiated a lawsuit against the Securities and Exchange Commission (SEC) and its Chair, Gary Gensler. The states accuse the SEC of “gross government overreach” in its approach to cryptocurrency regulation. This coalition includes Nebraska, Tennessee, Wyoming, Kentucky, Texas, Mississippi, Ohio, and Montana.
The lawsuit claims the SEC has overstepped its authority by attempting to classify cryptocurrencies as securities without Congressional approval. The complaint says the SEC’s actions violate state-level jurisdiction and try to exercise unauthorized regulatory authority over the cryptocurrency market. Nebraska Attorney General Mike Hilgers and Kentucky AG Russell Coleman lead the legal action.
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Gensler’s Leadership Under Scrutiny as SEC Faces Backlash
SEC Chair Gary Gensler’s approach to crypto regulation has sparked widespread criticism from industry leaders and political figures. Ripple’s Chief Legal Officer, Stuart Alderoty, has remained a significant critic of Gensler’s policies, with the official guns blazing to attack the regulator for allegedly retrogressing progress.
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The lawsuit comes amid increasing campus demands for Gensler to resign in light of Donald Trump’s win. Speculation suggests that Gensler could be replaced as early as January 2025 when Trump assumes office. Potential candidates include SEC Commissioner Mark Uyeda, who has criticized Gensler’s enforcement-driven strategy, and Dan Gallagher, a former SEC commissioner and current legal officer at Robinhood.
Despite mounting pressure, Gensler defended his position in a recent speech. He emphasized the risks of crypto assets, citing investor harm and limited use cases for most digital currencies. Gensler maintained that tighter oversight is necessary to protect the financial system and consumers.
Conclusion
This lawsuit signals escalating tensions between state and federal authorities over crypto regulation. Its outcome may have far-reaching implications for the future of digital asset oversight in the U.S.
Also Read: SEC Files Ripple Appeal on Gary Gensler’s Birthday Amidst Deadline Saga
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.