A federal judge has paused a lawsuit against the SEC by state attorneys general and the DeFi Education Fund, alleging SEC overreach in regulating cryptocurrencies. The 60-day pause follows the appointment of pro-crypto SEC chair Paul Atkins. The SEC is shifting its approach, dropping key cases against Ripple and Kraken.
A federal judge has granted a motion to temporarily suspend the lawsuit initiated by a coalition of state attorneys general and the DeFi Education Fund against the U.S. Securities and Exchange Commission (SEC). The lawsuit, filed in November, asserts that the SEC has exceeded its jurisdiction by pursuing enforcement actions against cryptocurrency exchanges, claiming that authority over digital assets resides with individual states.
The complaint contends that the SEC has attempted to assert regulatory control without legislative backing, arguing that the commission’s stance categorises nearly all cryptocurrency transactions as ‘investment contracts.’ This situation raises concerns regarding the SEC’s overreach into state governance of digital assets.
On April 16th, Judge Gregory Van Tatenhove from the Eastern District of Kentucky imposed a 60-day halt on all legal proceedings concerning the case, a decision influenced by the recent appointment of Paul Atkins, a pro-crypto advocate, as the new SEC chair. This pause indicates a potential shift in the SEC’s approach to the cryptocurrency sector.
The SEC appears to be adopting a more conciliatory stance towards the digital asset market, as evidenced by its recent decision to discontinue several prominent crypto cases, including those against Ripple and Kraken. As developments unfold, the implications for the crypto regulatory environment are significant, heralding potential changes in how the SEC interacts with the sector.
