A federal judge agreed to stop an ongoing lawsuit between 18 state general prosecutors and a group of decentralized finance lobbyists against the United States Stock Exchange and Securities Commission (SEC) on Wednesday, after the parties noticed the new leadership of the SEC.
The state AGS, all Republicans, filed the lawsuit together with the Education Fund Defi last November after Donald Trump’s victory in the 2024 presidential elections. They claim that the federal values regulator had exceeded his authority by presenting demands against cryptographic exchanges. In Wednesday’s presentation, SEC suggested that Paul Atkins’ confirmation as president of the new agency could end the litigation.
“As support, the defendants claim that due to a leadership transition in the stock exchange and values commission, this case could be resolved,” the presentation said.
The judge ordered the parties to submit a joint status report within 30 days, but stopped all the deadlines for 60 days.
Originally, the lawsuit argued that the APPLICATION ACTIONS OF THE SEC entrusted in the skills of state regulators to monitor digital asset companies within their own borders.
“Some states, for example, have promulgated regulatory regimes for financial institutions focused on digital assets; others have required that digital asset platforms obtain security licenses and bonds for money transmitters to guarantee liquidity,” said the demand.
“While state regulatory approaches have varied in accordance with local needs, they have constantly strive to provide transparent and administrable rules of the road. And Congress has repeatedly rejected proposals to provide federal agencies with a broad regulatory power over digital assets.”
Congress is expected to choose a market structure legislation that can address the roles of federal regulators in the supervision of cryptography this year, and the key committees have already begun to hold hearings.
Meanwhile, the SEC has already eliminated investigations and demands in more than a dozen companies and stopped demands against some others.
Irs corridor rule
A separate lawsuit filed by the Defi Education Fund, the Texas Blockchain Council and the Blockchain Association against the Internal Revenue Service also withdrew on Wednesday. This lawsuit argued that the IRS Corridor rule was beyond the agency’s authority.
Trump signed a joint resolution of the Chamber and the Senate under the Congress Review Law that cancels this rule last week, the first legislative article that addresses the cryptography he signed as president.
In a presentation on Wednesday, the parties said the demand had become “debatable” after Trump signed the resolution.
