Legal Action Against SEC Suspended
A federal judge in the United States has agreed to temporarily suspend the legal action brought against the Securities and Exchange Commission (SEC) by 18 attorneys general from various Republican-led states, alongside the crypto advocacy group DeFi Education Fund. Judge Gregory Van Tatenhove, presiding over Kentucky District Court, issued a 60-day delay on April 16, highlighting that recent changes in SEC leadership might render the lawsuit unnecessary.
Changes in SEC Leadership
In his ruling, Judge Van Tatenhove referenced a mid-March communication from the SEC suggesting that the transition in leadership could lead to a resolution of the case. He has mandated that the involved parties submit a joint status update within the next 30 days.
Earlier this month, Paul Atkins took office as the new chair of the SEC, succeeding acting chair Mark Uyeda and former chair Gary Gensler. Atkins, who has previously served on the boards of various crypto advocacy organizations, now oversees the regulatory body as it reassesses its approach to cryptocurrency and related businesses.
Details of the Lawsuit
The lawsuit, initially filed in November by the attorneys general, contends that the SEC has overstepped its boundaries by pursuing legal actions against cryptocurrency exchanges and asserting regulatory authority that should belong to the states. Signatories of the suit include several attorneys general from states such as Nebraska, Tennessee, Wyoming, Kentucky, and Texas, among others. The complaint accuses the SEC of “gross government overreach” and underscores that such broad regulatory maneuvers were undertaken without congressional mandate.
Related Developments
In a related development, on the same date, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council opted to withdraw their lawsuit against the Internal Revenue Service (IRS). This action was taken because the case, initiated in December, had become moot, particularly after President Donald Trump signed legislation to nullify the controversial IRS rule that would have compelled DeFi platforms to disclose user transactions to the tax authority. This backdrop coincides with a trend of the SEC reassessing multiple high-profile legal actions against crypto enterprises following the leadership shift.
