17-4-2025 – A federal judge has temporarily halted a high-profile legal battle pitting 18 Republican state attorneys general and the DeFi Education Fund against the U.S. Securities and Exchange Commission (SEC). The decision, announced on Wednesday, follows the appointment of Paul Atkins as the SEC’s new chair, raising prospects that the dispute may be resolved without further litigation. The court has mandated a joint status report within 30 days, while suspending all related deadlines for 60 days to allow negotiations to unfold.
The lawsuit, launched in November 2024 after Donald Trump’s presidential election victory, accused the SEC of overstepping its jurisdiction by pursuing enforcement actions against cryptocurrency exchanges. The plaintiffs contended that such federal interventions encroached upon state regulators’ authority to oversee digital asset firms within their jurisdictions. They highlighted the diverse regulatory frameworks adopted by states—ranging from bespoke regimes for digital asset financial institutions to mandates for platforms to secure money-transmitter licences and liquidity bonds. These state-led approaches, the lawsuit argued, were tailored to local needs and designed to provide clear, practical guidelines, in contrast to the SEC’s allegedly overreaching tactics.
Meanwhile, legislative efforts are gaining traction in Congress to clarify the roles of federal regulators in the cryptocurrency space. Key committees have already commenced hearings on market structure legislation, which could redefine oversight boundaries for digital assets. The SEC, under its new leadership, has shown signs of recalibration, having recently terminated investigations and lawsuits against over a dozen firms and paused legal actions against others.
In a parallel development, a separate lawsuit challenging the Internal Revenue Service’s DeFi broker rule was dismissed on Wednesday. Brought by the DeFi Education Fund, the Texas Blockchain Council, and the Blockchain Association, the case argued that the IRS had exceeded its authority. The issue was rendered moot after President Trump signed a Congressional Review Act resolution last week, nullifying the rule in his first crypto-related legislative act since taking office. This swift resolution underscores the shifting regulatory landscape for digital finance as both judicial and legislative arenas respond to the evolving crypto ecosystem.
