FameEX Hot Topics | US Court Halts 18-State Lawsuit Against SEC Following Leadership Change

A U.S. federal judge has agreed to pause a lawsuit brought by 18 Republican state attorneys general and the DeFi Education Fund against the Securities and Exchange Commission (SEC), following signals that the case may be rendered moot by new leadership at the agency. Kentucky District Court Judge Gregory Van Tatenhove issued a 60-day stay on April 16, citing a March filing in which the SEC suggested the lawsuit could be resolved as a result of a leadership transition.

The court ordered all parties to submit a joint status report within 30 days. The change in leadership came earlier this month when Paul Atkins, a former Wall Street adviser and known crypto advocate, was sworn in as SEC chair. He replaces acting chair Mark Uyeda and former chair Gary Gensler, whose tenure saw heightened regulatory scrutiny of the crypto industry.

Originally filed in November, the lawsuit alleged that the SEC, under Gensler’s leadership, overstepped its authority by aggressively targeting crypto exchanges through enforcement actions. The complaint, supported by attorneys general from states including Texas, Florida, Kentucky, and Wyoming, accused the agency of undermining state-level oversight and bypassing Congress in its approach to regulating digital assets.

In a related development, on April 16, the DeFi Education Fund, along with the Blockchain Association and Texas Blockchain Council, voluntarily dismissed a separate lawsuit against the Internal Revenue Service (IRS). That case, filed in December, challenged the IRS’s proposed DeFi broker rule, arguing it was unconstitutional and exceeded the agency’s legal mandate.

The groups dropped the case shortly after President Donald Trump signed a bill on April 11 repealing the contested IRS rule, which would have required DeFi protocols to report user transactions. These developments reflect a broader regulatory shift, as the SEC under new leadership has recently paused or withdrawn several high-profile cases involving cryptocurrency firms, signaling a potential recalibration in its enforcement approach.

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