DES MOINES, Iowa, Saturday, July 27, 2024- A coalition of seven US states is challenging the Securities and Exchange Commission’s authority to regulate cryptocurrencies, arguing the agency is overstepping its bounds.
Iowa Attorney General’s statement can be read here.
Led by Iowa Attorney General Brenna Bird, the states filed an amicus brief on July 10 contending the SEC’s actions are an “unconstitutional power grab” that threatens innovation and harms the crypto industry. Arkansas, Indiana, Kansas, Montana, Nebraska, and Oklahoma joined Iowa in the legal challenge.
The states argue the SEC is overreaching its authority by trying to regulate cryptocurrencies as securities without congressional approval. They contend the agency’s actions violate the Administrative Procedure Act and the Major Questions Doctrine.
“The Biden SEC is trying to prevent states like Iowa from doing their job to hold robbers to the law and protect families from the dangers of cryptocurrency scams,” the filing said. “This power grab will also hurt the free market and allow the SEC to take the regulatory reins over the cryptocurrency industry with no accountability.”
The SEC has faced increasing criticism for its aggressive stance on cryptocurrencies. Commissioner Hester Peirce has publicly expressed concerns about the agency’s “enforcement-only mode” and the chilling effect it has on innovation.
Despite closing investigations into Hiro Systems and Paxos without taking enforcement action, the SEC has maintained a tough line on the industry. The states challenging the agency’s authority argue that clear rules are needed to provide certainty for businesses and investors.
