18 States File Lawsuit Against Biden Administration Over SEC Crypto Currency Actions
Eighteen states are taking legal action against the U.S. Securities and Exchange Commission (SEC) and members of the Biden administration over what they see as unfair treatment of cryptocurrency companies and their employees. The lawsuit, filed in the U.S. District Court for the Eastern District of Kentucky Frankfort Division, specifically names the SEC, its chair, and four commissioners as defendants.
The states involved in the lawsuit are Kentucky, Nebraska, Tennessee, West Virginia, Iowa, Texas, Mississippi, Montana, Arkansas, Ohio, Kansas, Missouri, Indiana, Utah, Louisiana, South Carolina, Oklahoma, Florida, and the DeFi Education Fund. They argue that as new blockchain technology has emerged, states have taken steps to regulate the digital asset industry. Some have enacted specific regulations for financial institutions dealing with digital assets, while others have required licenses for digital asset platforms.
In Kentucky, for example, the General Assembly passed a law that allows the state to take control of abandoned property, including virtual currency. According to Kentucky’s Attorney General Russell Coleman, the SEC’s actions prevent the state from enforcing its own laws. Kentucky is home to significant computing power used for crypto mining and offers tax incentives to encourage investment in digital asset mining, which also creates job opportunities.
The lawsuit contends that under the Biden administration’s SEC Chair Gary Gensler, there has been a crackdown on crypto companies by categorizing cryptocurrencies as investment contracts, subjecting them to SEC regulation. Despite states implementing their regulations, the lawsuit points out that Congress has not granted federal agencies broad regulatory power over digital assets. The AGs argue that the SEC is overstepping its bounds without proper authorization from Congress.
The states involved in the lawsuit assert that the SEC’s actions are undermining state authority and attempting to take regulatory control away from the states through enforcement actions targeting the digital asset industry. This legal battle highlights the complex regulatory landscape surrounding digital assets and the ongoing debate over federal and state authority in this space.
