Sunday, October 26, 2025

Republican States Sue SEC Over Crypto Enforcement Powers

18 Republican state attorneys general filed suit Thursday against the Securities and Exchange Commission, challenging federal authority over cryptocurrency oversight. Kentucky Attorney General Russell Coleman is leading the charge against what the states view as regulatory overreach by SEC Chair Gary Gensler and his agency.

The constitutional challenge strikes at the heart of federal-state regulatory balance. The complaint argues that the SEC has “unilaterally wrest regulatory authority away from the States” on crypto enforcement. Instead of respecting constitutional powers, the lawsuit contends, the agency’s “assertion of sweeping jurisdiction without congressional authorization deprives States of their proper sovereign role and chills the development of innovative regulatory frameworks for the digital asset industry.”

The states further argue that “by attempting to shoehorn digital assets into ill-fitting federal securities laws and inapt disclosure regimes, the SEC is harming the very citizens it purports to protect, by displacing better-suited state laws that have been carefully designed to ensure consumer protection in the digital asset industry.”

The legal battle emerges from longstanding tensions between the cryptocurrency industry and Gensler’s SEC, with industry players criticizing the agency’s preference for enforcement actions over clear regulatory guidance.

Gensler, addressing a legal conference Thursday, defended his agency’s approach. “Court after court has agreed with our actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered — whatever their form,” he said.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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