A coalition of state attorneys general and the DeFi Education Fund has filed a lawsuit against the US Securities and Exchange Commission, alleging that the agency has overstepped its authority in pursuing enforcement actions against cryptocurrency exchanges. The lawsuit, filed in the US District Court for the Eastern District of Kentucky, requests that a federal judge block the SEC from pursuing further enforcement actions, arguing that the agency's 'crypto policy' constitutes 'unlawful executive action' and violates the Administrative Procedures Act. The plaintiffs contend that the digital assets in question are not investment contracts subject to federal securities laws, but rather assets that fall outside the SEC's regulatory jurisdiction. The lawsuit also argues that the SEC's approach to regulating cryptocurrency is infringing upon states' rights to oversee the industry, and that the agency is exceeding its authority by pursuing issues not explicitly assigned to it by Congress.
The DeFi Education Fund's CEO, Miller Whitehouse-Levine, stated that the lawsuit aims to address the SEC's 'overreach' and ensure that the agency does not stifle the growth of the cryptocurrency industry. An SEC spokesperson declined to comment on the lawsuit, citing the agency's policy of not commenting on ongoing litigation. Earlier, SEC Chair Gary Gensler discussed the agency's approach to regulating cryptocurrency, emphasizing the need for investor protection and highlighting the potential risks associated with the industry.