A federal judge in Kentucky gave a 60-day stay in the case. This is the lawsuit brought by 18 state attorneys general and the DeFi Education Fund against the SEC. On April 16, 2025, Judge Gregory Van Tatenhove of the U.S. District Court for the Eastern District of Kentucky issued the stay. This decision followed an unusual joint filing by the plaintiffs and the SEC. The pause comes as new leadership at the agency signals a potential shift in approach to cryptocurrency regulation that might resolve the dispute.
In November 2023, a lawsuit was filed that directly challenged the SEC’s regulatory approach against crypto exchanges. ATU’s complaint alleges that the agency overreached its authority by acting independently, without pursuing approval from Congress. Republican state attorneys general from Kentucky, Florida, Texas, and Ohio contend that the SEC is exceeding its authority. They are convinced that any attempt to repeal their jurisdiction requires the support of state enabling legislation. They claim that former SEC Chair Gary Gensler pressured the regulator to apply illegal jurisdiction over crypto exchanges. This was accomplished through punitive enforcement actions.
The SEC offered a similar mid-March notice arguing that changes in leadership would make the legal fight moot. At the beginning of this month, the libertarian Paul Atkins was confirmed to lead the SEC. He was appointed to succeed Mark Uyeda, who had himself succeeded Gary Gensler. Since his confirmation, Gensler’s tenure has been decidedly fixated on crypto industry oversight. The judge has ordered all parties and intervenors who are participating to submit a joint status report within the next 30 days.
This marked the latest in a series of lawsuits being stayed or abandoned altogether under new SEC leadership. On the very same day that the stay was issued, the DeFi Educational Fund placed their bet. Together with the Blockchain Association and Texas Blockchain Council, they voluntarily dropped their lawsuit against the IRS. On April 11, President Donald Trump signed a bill to repeal the treasury rule. This move nullified the IRS’s controversial requirement for DeFi protocols to report their users’ transactions to the IRS, rendering the DeFi broker rule unnecessary by its own logic.
The plaintiffs contend that the SEC exceeds the bounds of federalism. They argue that the agency’s regulatory actions should need legislative approval from states in order to rescind their jurisdiction. The SEC acted independently, without approval from Congress. It criticized himself for engaging in extralegal supervision over crypto exchanges via enforcement actions.
