Gary Gensler And SEC Accused Of “Gross Government Overreach” In Joint Lawsuit By 18 US States

18 US states have filed a lawsuit against Securities and Exchange Commission (SEC) Chair Gary Gensler accusing the anti-crypto regulator of “gross government overreach” against the digital asset industry. 

“The Securities and Exchange Commission (SEC) has not respected this allocation of authority,” said the plaintiffs, which includes Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, and others, in the filing. They added that the financial regulator “has sought to unilaterally wrest regulatory authority away from the States.”

US Crypto Industry Loses Millions Of Dollars To SEC Enforcement Actions

The SEC, under Gensler’s leadership, has opted to use an aggressive regulation by enforcement approach. This has forced crypto companies operating in the US to spend millions of dollars on lawsuits initiated by the regulator.

According to the Blockchain Association, legal actions by the SEC have cost the crypto industry $426 million collectively since 2021. Several large crypto firms, such as Binance, Consensys, Coinbase and Kraken, have had to face off with the regulator in the courtroom.

Gensler has increasingly come under fire from crypto executives and pro-crypto politicians as well. Earlier this year, President-elect Donald Trump subsequently promised that he would “fire” the SEC chair on his first day in office to win over voters.

BREAKING: Donald Trump to fire Gary Gensler and hire pro-Bitcoin administration. pic.twitter.com/KxUYoBM65s

— Jordan Harmon (@JordanHarmon) July 27, 2024

Gary Gensler Doubles Down On Crypto Criticism

Despite Trump’s promise to remove Gensler as soon as he becomes the US President, the SEC Chair continues to double down on his criticism of the nascent crypto industry.

“This is a field in which over the years there has been significant investor harm,” he said in a Nov. 14 speech at the Practicing Law Institute’s 56th Annual Institute on Securities Regulation. “Aside from speculative investing, and possible use for illicit activities, the vast majority of crypto assets have yet to prove sustainable use cases,” he added.

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