A new lawsuit signed by 18 Republican Attorneys General accuses the SEC of unfair practices in prior crypto crackdowns. The suit names the SEC and all five of its Commissioners.
However, two of these Commissioners are Trump appointees, and one is even a vocal crypto proponent, complicating the issue.
New Suit Against the SEC
In a remarkable development discovered by journalist Eleanor Terrett, 18 US states have filed lawsuits against the SEC. This news broke on the same day that SEC Chair Gary Gensler gave a speech tacitly acknowledging his impending ouster from the Commission.
“Congress has repeatedly declined proposals to give federal agencies broad regulatory power over digital assets. The SEC has not respected this allocation of authority. Instead, without Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority away from the States through an ongoing series of enforcement actions,” the suit read.
All 18 states represented in this lawsuit turned out strong Republican victories in the most recent election. Each state’s respective Attorney General signed the suit, all of whom were Republicans.
In other words, it’s safe to assume the suit is part of Trump’s broader initiative to reform crypto regulation. However, Trump himself may or may not be personally involved.
These states filed in the Eastern District of Kentucky, and the suit names the SEC and all its Commissioners. Bizarrely, this includes “Crypto Mom” Hester Peirce, whom Trump himself appointed. This civil suit accuses the group of “gross government overreach” in the SEC’s crypto crackdowns.
Still, there’s no indication of the lawsuit’s chances of succeeding. The SEC declined to comment on this case.
Ultimately, this civil suit likely amounts to a pressure tactic. Legally speaking, Trump may be able to remove Gensler’s leadership over the Commission, but he can’t remove him outright. Lawsuits like this, however, may encourage Gensler to resign before Trump’s inauguration in January.
Also in the past week, Terrett covered new pro-crypto legislative efforts, plus industry-leaning statements from a frontrunner for Treasury Secretary and the new Senate Majority Leader. The US may be in a lame-duck period, but momentum is building.
