Cryptocurrency Regulation News: Republican States Halt SEC Lawsuit Over Crypto Powers
Republican States Temporarily Halt SEC Lawsuit Over Its Cryptocurrency Authority
Crypto lobbyists also withdrew their complaint against the US Internal Revenue Service (IRS).
Author: Nikhilesh De | Edited by Aoyon Ashraf , April 16, 2025, 10:05 PM
Key points:
- Republican state attorneys general have asked a judge to halt an ongoing lawsuit against the U.S. Securities and Exchange Commission, citing the agency's new leadership.
- The lawsuit, filed in November, alleged that the SEC was interfering with the powers of government regulators.
A federal judge on Wednesday agreed to temporarily halt a lawsuit between 18 state attorneys general and a decentralized finance lobby group against the U.S. Securities and Exchange Commission (SEC) after the parties cited new SEC guidance.
State attorneys general, all Republicans, filed the lawsuit along with the DeFi Education Fund last November after Donald Trump won the 2024 presidential election. They allege that the federal securities regulator overstepped its authority by suing cryptocurrency exchanges. In a statement Wednesday, the SEC said the appointment of Paul Atkins as its new chairman could lead to a resolution to the lawsuit.
“In support of their position, defendants argue that with new leadership at the SEC, this case could potentially be resolved,” the statement said.
The judge ordered the parties to file a joint status report within 30 days, but suspended all deadlines for 60 days.
The lawsuit initially alleged that the SEC's enforcement actions violated government agencies' authority to oversee digital asset companies in their jurisdictions.
“For example, some states have adopted regulatory regimes for financial institutions that focus on digital assets; others require digital asset platforms to obtain money transmitter licenses and collateral obligations to provide liquidity,” the lawsuit notes.
“While state-level approaches to regulation have varied based on local needs, they have always sought to create transparent and manageable rules. And Congress has repeatedly rejected proposals to expand federal agencies’ authority to regulate digital assets.”
Congress is expected to consider a market framework bill this year that could address the role of federal regulators in overseeing cryptocurrencies, and key committees have already begun holding hearings.
Meanwhile, the SEC has suspended investigations and lawsuits against more than a dozen companies and halted lawsuits against several others.
IRS Broker Rule
A separate lawsuit filed by the DeFi Education Fund, the Texas Blockchain Council, and the Blockchain Association against the Internal Revenue Service was also dismissed on Wednesday. That lawsuit alleged that the IRS's rule on DeFi brokers exceeds the agency's authority.
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