The Securities and Exchange Commission (SEC) and Chairman Gary Gensler are accused of exceeding their authority in the management of cryptocurrencies, causing $426 million in damage to the industry.
On November 14, 18 U.S. states, including Nebraska, Tennessee, Wyoming, and Texas, filed a lawsuit against the Securities and Exchange Commission (SEC) and Chairman Gary Gensler, alleging that the SEC has exceeded its authority by imposing regulations on cryptocurrencies without clear authorization from Congress, causing significant damage to this industry.
According to the Blockchain Association, the SEC's legal actions since 2021 have caused cryptocurrency companies to suffer losses of up to $426 million.
The lawsuit emphasizes that by striving to gain control over the cryptocurrency sector, the SEC has created instability and hindered the development of the market, which is currently being coordinated by state-level regulatory agencies.
According to these states, the SEC's enforcement of strict measures without a clear legal framework has created significant uncertainty for businesses, causing many projects to move their operations to countries with more transparent regulations.
Leaders in the cryptocurrency industry have criticized the SEC's compliance-focused enforcement approach under Chairman Gary Gensler, arguing that this has created difficulties for developers and forced them to navigate a series of unstable regulations, causing many investors to hesitate and delay their development plans, weakening the United States' competitiveness in the cryptocurrency field.
Although President-elect Donald Trump had pledged to change the SEC's leadership, including considering the replacement of Chairman Gensler, Gensler has maintained a firm stance. In a recent speech, he emphasized that cryptocurrencies are a high-risk area, lacking sustainable use cases, and have the potential to harm investors.
Whether Gensler will continue to hold his position will depend on the new administration. Among the potential replacements, SEC Commissioner Mark Uyeda, who has publicly criticized the current policies, and Dan Gallagher, a former SEC Commissioner and current Chief Legal and Compliance Officer at Robinhood, are prominent candidates.
