A federal judge has temporarily paused a major lawsuit filed by 18 U.S. states against the Securities and Exchange Commission (SEC), which challenges the agency’s authority in regulating the crypto industry.
The coalition of states, led by Utah and Arkansas, argues that the SEC has been overstepping its legal bounds by enforcing regulations on digital assets without clear guidance or congressional approval. They claim the commission’s actions are stifling innovation and harming the growing crypto sector.
The judge’s decision to delay proceedings gives time to evaluate whether the states have the legal standing to bring the case forward. The court is expected to examine whether the SEC’s approach to digital assets indeed violates constitutional limits or if the lawsuit lacks sufficient grounds.
This case is one of several legal battles brewing in the U.S. over how cryptocurrency should be regulated and who has the authority to do so. The outcome could have far-reaching implications for how crypto businesses operate and how investors engage with digital assets in the future.
