Crypto News

SEC Faces Retaliation From States Over Crypto Regulations In Kraken Case


Several US state attorneys general and pro-crypto factions have filed amicus briefs opposing the Securities and Exchange Commission (SEC) case against Kraken.

Montana and other briefs against the SEC

On February 29, a coalition of state attorneys general from Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota and Texas jointly submitted a brief that does not support neither party but disputes the SEC’s position in this matter.

An analysis of the filing by Paul Grewal, Coinbase’s chief legal officer, noted that the states were alleging that “the SEC’s ‘ecosystem’ theory was illegal and in fact posed a danger to their citizens.”

He said:

“(States) have a vested interest in preventing the potential preemption of consumer protection and other state laws by the SEC’s attempt to regulate crypto assets as securities.”

The lawyer further pointed out that many states have established legal frameworks treating digital assets as money transmitters. According to him, these entities must register, meet minimum net worth requirements, ensure numerous security measures and undergo regulatory reviews.

However, these state-level regulations face potential preemption risks related to SEC actions.

Pro-crypto lawyer Bill Morgan added that the amicus brief showed that “tThe whole world is against SEC crypto overreach except for a few people like Elizabeth Warren with agendas and motivations that are anything but a concern for consumer protection.

Pro-crypto groups are speaking out.

In addition to state attorneys general, several pro-crypto groups, including the Chamber of Digital Commerce and the Blockchain Association, have also filed similar complaints against the SEC.

In its filing, the Chamber of Digital Commerce argued that the SEC’s expansion of securities laws threatened blockchain technology. Thus, the group urged the court to stop the SEC’s attempt to regulate the emerging industry without legislative authorization.

The Blockchain Association and the DeFi Education Fund made similar arguments in their filing. They declared:

“The brief criticizes the SEC’s attempt to regulate digital assets beyond its authority granted by Congress. The agency’s inconsistent position on investment contracts has no legal precedent and is creating widespread confusion in the industry.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button