July 23, 2024
By Anjali Kochhar
A coalition of seven U.S. states has united to challenge the U.S. Securities and Exchange Commission’s (SEC) regulation of cryptocurrency. Led by Iowa Attorney General Brenna Bird, the coalition filed an amicus brief on July 10, arguing that the SEC’s actions would stifle innovation, harm the crypto industry, and exceed its legal authority.
The coalition, comprising Iowa, Arkansas, Indiana, Kansas, Montana, Nebraska, and Oklahoma, views the SEC’s regulation efforts as a significant overreach. “The SEC’s power grab may stop states from protecting their citizens from scams and it hurts the free market,” the announcement from the Iowa Attorney General’s Office stated. It emphasised that states like Iowa have been at the forefront of protecting scam victims and prosecuting scammers, and the SEC’s actions would undermine these efforts.
The coalition’s brief contends that the SEC is attempting to usurp state powers and overstep its bounds by policing cryptocurrency without proper authority. “The Biden SEC is trying to prevent states like Iowa from doing their job to hold scammers accountable and protect families from cryptocurrency scams,” Bird noted. “This power grab will also hurt the free market and allow the SEC to take regulatory control over the cryptocurrency industry without accountability.”
The brief argues that the SEC’s actions violate the Administrative Procedure Act and the Major Questions Doctrine by bypassing Congress. The coalition insists that typical cryptocurrencies do not fall under the definition of investment contracts as per the Securities Act of 1934, urging the court to prevent the SEC from exceeding its mandate.
“The SEC is attempting to abuse its power and put itself in charge of regulating cryptocurrency, bypassing state consumer-protection laws,” the brief concluded. The coalition is calling for judicial intervention to stop what it sees as an illegal expansion of the SEC’s regulatory reach, which they believe will stifle innovation and allow scammers to evade accountability.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
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