The battle between state attorneys general and the U.S. Securities and Exchange Commission over crypto regulation just hit pause.
On April 16, Judge Gregory Van Tatenhove of the Eastern District of Kentucky granted a 60-day stay in the case, citing the SEC’s own admission that “this case could potentially be resolved” due to a leadership transition.
Both sides did not object to the motion and are now required to submit a joint status update within 30 days.
The pause follows the Trump administration’s departure from the SEC’s former enforcement-heavy crypto agenda, signaling a regulatory climate far more favorable to the industry.
Filed last November by a coalition of state attorneys general, the lawsuit accused the SEC under its former Chair Gary Gensler of overstepping its authority by targeting crypto firms without proper rulemaking.
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Ahead of an expected regulatory leadership transition following the election of Donald Trump, 18 states have filed suit against the Securities and Exchange Commission (SEC) and its commissioners, including Chairman Gary Gensler, over its crackdown on the crypto industry. Filed Thursday, the suit from 18 states and their respective attorneys general—all Republicans—along with the DeFi Education Fund, alleges that the regulator violated the U.S. Constitution in its approach to regulating digital a...
It claimed the regulator’s “sweeping assertion of regulatory jurisdiction” violated the Constitution and ignored the role of Congress.
“The SEC has sought to unilaterally wrest regulatory authority away from the States,” the complaint said.
Led by Kentucky Attorney General Russell Coleman, the coalition asked the court to block the SEC from continuing to sue digital asset firms for securities violations based on interpretations never formally codified into law.
The SEC’s crypto pivot
Paul Atkins, a former SEC commissioner with ties to crypto policy groups, was confirmed by the Senate earlier this month and sworn in as SEC Chair, replacing acting chair Mark Uyeda.
A known crypto advocate, Uyeda has overseen the dismissal or suspension of at least a dozen cases and investigations that were launched under Gensler’s tenure.
The SEC has dropped lawsuits or probes involving Coinbase, Kraken, Uniswap Labs, OpenSea, Consensys, Robinhood Crypto, Immutable, Crypto.com, Gemini Trust, Yuga Labs, and many others.
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The momentum has shifted in the yearslong battle between top crypto companies and protocols and the U.S. Securities and Exchange Commission under the new Trump administration. The regulator, which now has a crypto task force led by longtime industry advocate Hester Peirce, is moving away from what Pierce and others have called “regulation by enforcement” to less hostile engagements with crypto. Thus far, those words have rung true with the SEC recently backing away from fights with multiple to...
Some were pending court decisions; others were closed preemptively. In each case, the agency issued little justification beyond a desire to “reform and renew” its crypto approach.
A dedicated crypto task force, now led by Commissioner Hester Peirce, also known as ‘Crypto Mom,’ has been tasked with developing clearer guidelines through formal rulemaking.
The Commission is also holding internal briefings to reassess how securities law applies to decentralized finance (DeFi), NFTs, and token distributions.
On April 11, Trump signed a bill repealing the IRS’s DeFi “broker rule.” Days later, the DeFi Education Fund and others voluntarily dismissed their separate lawsuit against the IRS, calling it moot.
