Recently, 18 states in the United States jointly filed lawsuits against the Securities and Exchange Commission (SEC) and its chairman, Gary Gensler, for their law enforcement actions involving the encryption industry, citing 'excessive expansion of government power'.

18 state governments jointly sue, protesting SEC's abuse of power and weakening of state power.

According to FOX reporters, the lawsuit was signed by 18 Republican attorneys general, detailing how the agency, through law enforcement on a $3 trillion industry, seriously overstepped government regulation, leading to infringement of states' rights to regulate their economies.

The SEC, without congressional authorization, has unilaterally expanded its regulatory authority over the encryption industry through law enforcement actions, and attempted to take away the regulatory power of state governments, without respecting the allocation of powers.

Gensler's tough stance, insisting on anti-encryption policy

Despite the pressure of the upcoming Trump administration and the possibility of being removed, Gary Gensler still delivered a tough speech at the securities regulatory annual meeting on 11/14, stating that many encryption assets still lack long-term value and practical applications, and similar situations have had a negative impact on investors.

Potential successors emerge, new SEC chairman or pro-encryption.

Trump had previously publicly stated that if elected, he would replace Gensler and appoint a leader who is more supportive of the encryption industry. Currently, potential candidates to succeed Gensler are those who have criticized Gensler's approach of 'enforcement before regulation' towards the encryption industry, such as current SEC commissioner Mark Uyeda. Another potential candidate is Dan Gallagher, former SEC commissioner and current General Counsel of Robinhood, a securities broker that actively fought against SEC's legal lawsuit against Robinhood Crypto this year.

(The Trump administration may choose the SEC chairman, and it is rumored that Robinhood's legal department will take over Gary Gensler)

Industry criticizes SEC policy, lawsuit costs up to $426 million

According to statistics from the Blockchain Association, since 2021, the SEC's multiple enforcement actions against the encryption industry have forced companies to pay up to $429 million in legal fees. It is widely believed in the industry that the lack of clear digital asset regulatory policies in the United States is one of the biggest challenges faced by American developers.

With the new government coming into power, the prospect of encryption regulation has sparked expectations.

With the election of Trump and the new government taking office in 2025, the market generally expects a major change in the regulatory direction of the SEC. The joint lawsuit of the 18 states not only reflects the dissatisfaction of the state governments with the unauthorized expansion of federal agencies, but also highlights the urgent need of the industry for a reasonable regulatory direction. The market is also looking forward to the new SEC chairman candidate and is optimistic about the future encryption policy direction.

(SEC officials frequently switch to law firms)

This article: 18 US states sued the SEC and Gensler, protesting against the "excessive expansion of power" in encryption regulation, first appeared in ChainNews ABMedia.