18 States v. SEC

Eighteen states (Kentucky, Nebraska, Tennessee, West Virginia, Iowa, Texas, Mississippi, Montana, Arkansas, Ohio, Kansas, Missouri, Indiana, Utah, Louisiana, South Carolina, Oklahoma, Florida) and the DeFi Education Fund (DEF) filed a lawsuit against the SEC on November 15, 2024, in the U.S. District Court for the Eastern District of Kentucky (Case No. 6:24-cv-00373). The plaintiffs challenge the SEC’s crypto policy, which treats secondary digital asset transactions as investment contracts and platforms facilitating such transactions as securities exchanges, broker-dealers, or clearing agencies subject to registration under the Securities Act of 1933 and Exchange Act of 1934. The complaint alleges the SEC exceeds its statutory authority, preempts state laws (e.g., money transmitter regulations), harms the digital asset economy, and violates the Administrative Procedure Act. The plaintiffs seek declarations that certain digital asset transactions are not securities and that platforms need not register, plus an injunction against SEC enforcement actions based on non-registration. On April 20, 2025, the court paused the case for 60 days to allow settlement negotiations, following the appointment of new SEC Chairman Paul Atkins, with a joint status report due within 30 days. The case remains ongoing as of May 2025.