Eighteen US States File Lawsuit Against SEC, Gary Gensler Over Regulatory Overreach

The Securities and Exchange Commission (SEC) and its Chairperson Gary Gensler are the subjects of a lawsuit from 18 US States accusing the agency of regulatory overreach.

In a Thursday disclosure, FOX Business reporter Eleanor Terrett confirmed the lawsuit, signed by the Attorney Generals of the 18 US States and filed at the US District Court for the Eastern District of Kentucky, Frankfort Division.

Notably, the plaintiffs accuse the US SEC and Gensler of imposing laws beyond their jurisdiction and, hence, wrestling regulatory authorities off the states. 

Interestingly, Republican Attorneys represented the 18 US States, including Nebraska, Tennessee, West Virginia, Texas, Louisiana, Florida, and Montana, in collaboration with the DeFi Education Funds.

SEC Charged for Regulatory Overreach

The 18 States accused the US SEC of regulatory authority overreach and a conscious ploy to scuffle the growth of the nascent digital asset industry. They claim the agency has, under its Chair Gensler, bypassed due authorization.

The plaintiff argued that cryptocurrency regulation has been under the State, which has enacted laws based on its local demands. The lawsuit also noted that Congress has repeatedly refused federal regulators the right to oversee the emerging industry.

However, the US SEC and Gensler have overridden due procedures to unconstitutionally regulate the crypto industry. Adding to the infringement, the agency has unfairly prosecuted the sector through a series of enforcement actions.

Notably, the SEC’s regulation of the crypto sector has been contentious, with industry leaders bemoaning the unclear guidelines imposed on digital assets. Clarity was one of the crucial factors influencing the sector’s election allegiance, as key crypto voices supported pro-crypto candidates.

Industry Enthusiasts Clampdown on Gensler Amid Sack Rumors

Amidst swelling rumors of Gensler’s sack, pro-crypto Republicans have turned up the heat on the SEC and its underfire boss. The lawsuit seeks to hold Gensler accountable following his terror-packed tenure as the SEC chair.

Meanwhile, the Trump transition team is already surveilling likely replacements for Gensler, with a few names making the rounds. Candidates like Robinhood’s CLO Dan Gallagher, Crypto Mum Hester Pierce, and Mark Uyeda are all on the radar to succeed Gensler.

The Trump camp assured the industry that the next SEC chair would be pro-crypto. The president-elect’s transition team has insisted that support for the nascent sector is the principal criterion in its selection process for the position.