A U.S. federal court has paused an ongoing lawsuit filed by 18 state attorneys general and the crypto lobby group DeFi Education Fund against the Securities and Exchange Commission (SEC) following a leadership change at the agency.
The lawsuit, initiated in November 2024 by Republican state AGs, alleged that the SEC exceeded its authority by targeting crypto exchanges and sought to wrest regulatory authority away from the states without Congressional authorization.
Kentucky District Court Judge Gregory Van Tatenhove ordered a 60-day stay on the case on April 16, 2025, after the SEC indicated in a mid-March filing that the case could potentially be resolved due to the recent leadership transition at the SEC.
The new SEC chair, Paul Atkins, was sworn in earlier in April 2025, replacing acting chair Mark Uyeda and former chair Gary Gensler. The parties involved must file a joint status report within 30 days of the stay order.
This pause reflects the expectation that the new SEC leadership under Paul Atkins, who has a background in crypto advocacy and has been critical of prior SEC regulatory approaches, might take a different stance on crypto regulation that could render the lawsuit moot.
The lawsuit's original complaint emphasized states’ rights to regulate digital asset platforms and argued that Congress had not granted the SEC broad authority over the crypto industry.
The lawsuit by 18 states against the SEC has been temporarily halted for 60 days to allow the new SEC leadership to potentially resolve the dispute, signaling a significant shift in the regulatory landscape for cryptocurrencies in the U.S.
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