Texas Attorney General Ken Paxton joined a multistate coalition suing the federal government for imposing new regulations on cryptocurrency exchanges.
The lawsuit targets leading members of the U.S. Securities and Exchange Commission by alleging that the SEC sought to wrangle regulatory authority over cryptocurrency away from the states and place it into the hands of the federal government—all without congressional authorization.
According to the attorney general, the Biden-Harris administration attempted to impose a rule designed to strong-arm digital asset platforms into registering with the SEC as securities exchanges, dealers, brokers, and clearinghouses.
The rule would also mandate subsequent compliance with federal securities laws.
The SEC asserted that its actions are protected by securities and exchange legislation enacted in the early 1930s. However, Paxton has argued that these laws are almost 100 years old and in no way apply to cryptocurrency exchanges.
“Federal bureaucrats in Washington have no authority to dictate to States how they should interact with cryptocurrency nor do they have the power to crush this new field with a regulatory framework that Congress never intended,” stated Paxton.
The lawsuit seeks injunctive relief to block the federal government and the SEC from continuing its regulatory overreach and flouting states’ sovereignty.
Texas joined the lawsuit with Kentucky, Nebraska, Tennessee, Virginia, Iowa, Mississippi, Montana, Arkansas, Ohio, Kansas, Missouri, Indiana, Utah, Louisiana, South Carolina, Oklahoma, and Florida.
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