In a significant challenge to the US Securities and Exchange Commission (SEC) and its regulatory approach toward the crypto industry, 18 states have filed a lawsuit against the agency and its commissioners on Thursday. 

FOX journalist Eleanor Terret reported that this legal action accuses the SEC of “unconstitutional overreach” and “unfair persecution” of the crypto sector, particularly under the leadership of Chair Gary Gensler.

The lawsuit, spearheaded by 18 Republican Attorneys General, highlights what they describe as “gross government overreach” in the SEC’s enforcement-driven regulation of the $3 trillion crypto market. 

The states argue that these actions infringe upon their rights to regulate their own economies, asserting that the SEC has failed to respect existing regulatory frameworks for financial institutions dealing with digital assets. 

They contend that, without congressional authorization, the SEC has attempted to “unilaterally wrest regulatory authority away from the States” through a series of enforcement actions targeting the crypto market.

Among the states participating in this lawsuit are Kentucky, Nebraska, Tennessee, West Virginia, Iowa, Texas, Mississippi, Montana, and Florida. 

Notably, Florida has made strides toward digital asset adoption, including proposals to designate Bitcoin, the largest cryptocurrency of the market, as a strategic reserve asset for the state.

Adding to the intrigue surrounding the SEC, NewsBTC reported that Chair Gensler hinted at a potential resignation in a letter to agency staff that read like a farewell message after three years in his role under President Biden. 

Over the past nine days, following Donald Trump’s election victory over Vice President Kamala Harris, the total crypto market cap valuation has risen to near the $3 trillion mark, currently valued at $2.8 trillion, following a retracement experienced by digital assets prices over the past 24 hours.

Featured image from DALL-E, chart from TradignView.com 

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