A US federal magistrate has consented to suspend a lawsuit initiated by 18 state attorneys general and the cryptocurrency advocacy group DeFi Education Fund against the Securities and Exchange Commission after all involved parties expressed that new SEC leadership might render the case irrelevant.
Kentucky District Court Judge Gregory Van Tatenhove mandated a 60-day hold on the matter on April 16, referencing a mid-March submission from the SEC that indicated “this case could potentially be resolved” due to a leadership shift at the regulatory body.
He remarked that the parties are required to submit a joint status update within 30 days.
Paul Atkins, a Wall Street consultant with previous board roles in cryptocurrency advocacy organizations, was inaugurated as the new SEC chair earlier this month, succeeding acting chair Mark Uyeda and taking over from Gary Gensler.
The 18 attorneys general, all from Republican-led states, initiated the lawsuit along with the DeFi Education Fund against the securities agency in November, claiming that the SEC overstepped its jurisdiction when pursuing legal actions against cryptocurrency exchanges, accusing the agency and former chair Gensler of “significant government overreach.”
The plaintiffs included attorneys general from Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, Indiana, Oklahoma, and Florida, among others.
“Absent Congressional permission, the SEC has attempted to unilaterally seize regulatory power from the States through a continuous series of enforcement actions,” the lawsuit asserted.
DeFi groups withdraw case against IRS over rescinded broker rule
In another development, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council dismissed their lawsuit against the Internal Revenue Service on April 16.
“The parties hereby agree to the voluntary withdrawal of this action without prejudice as the matter has become moot,” stated the filing.
The lawsuit, submitted in December, contended that the so-called IRS DeFi broker rule exceeded the agency’s authority and was unconstitutional.
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On April 11, President Donald Trump enacted a bill to eliminate the rule that would have mandated DeFi protocols to report transactions to the IRS.
This occurs as the SEC has paused or withdrawn several notable lawsuits against cryptocurrency firms this year under its new leadership.
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