tl;dr
A lawsuit filed by 18 state attorneys general against the SEC over its crypto regulation has been paused for 60 days by a Kentucky judge, citing the SEC's leadership transition. The suit accuses the SEC under former Chair Gary Gensler of overstepping its authority by targeting crypto firms without f...
A federal judge has granted a 60-day stay in the lawsuit filed by 18 state attorneys general against the U.S. Securities and Exchange Commission (SEC), citing the potential for resolution amid changes in SEC leadership. The case, which accuses the SEC under former Chair Gary Gensler of regulatory overreach in crypto enforcement without formal rulemaking, has been paused following the confirmation of Paul Atkins as the new SEC Chair.
Under Atkins, a known crypto advocate, the SEC has shifted its approach by dismissing or suspending numerous enforcement actions initiated under the previous administration. High-profile cases involving major crypto firms such as Coinbase, Kraken, Uniswap Labs, OpenSea, and others have been dropped or put on hold, signaling a more industry-friendly regulatory environment.
The SEC’s dedicated crypto task force, now led by Commissioner Hester Peirce—often referred to as “Crypto Mom”—is actively working on formal rulemaking aimed at providing clearer regulatory guidelines surrounding decentralized finance (DeFi), non-fungible tokens (NFTs), and token distributions. These efforts represent a significant move toward regulatory clarity and predictability for the evolving crypto sector.
Recent legislative developments complement these regulatory shifts. Notably, the repeal of the IRS’s controversial DeFi “broker rule” has led to the voluntary dismissal of a related lawsuit, further reflecting the trend toward a more accommodating stance toward crypto innovations within federal agencies.
The original lawsuit, led by Kentucky Attorney General Russell Coleman, alleges that the SEC unlawfully expanded its jurisdiction over digital asset firms, effectively bypassing Congress and infringing on states' rights. The 60-day stay ordered by Judge Gregory Van Tatenhove in the Eastern District of Kentucky allows both parties to reassess the situation during this period of transition at the SEC, with a joint status update required within 30 days.
This temporary pause and regulatory pivot mark a pivotal moment in the ongoing debate over crypto oversight, as the industry watches closely to see how new leadership will shape policies that balance innovation with investor protection.