- A federal judge has paused a lawsuit that seeks to question the SEC’s role in regulating cryptocurrencies.
- This is in light of changes in the SEC’s leadership, with the recent appointment of Paul Atkins as its head.
- Under its new leadership, the SEC is evaluating all of its prior moves concerning cryptocurrencies.
A major lawsuit challenging the authority of the Securities and Exchange Commission (SEC) in matters concerning virtual assets has been put on hold for 60 days by a federal judge. The case was initiated in November 2024 by 18 Republican state attorneys general and the DeFi Education Fund.
They criticized the SEC for overstretching its regulatory role especially on operations of cryptocurrency exchanges. In their arguments, the plaintiffs such as those from Texas, Florida and Ohio criticized the SEC actions as being outside federal authority and infringing with states’ rights.
On April 16, Judge Gregory Van Tatenhove of the Kentucky District Court agreed on the delay, citing the SEC’s request for the pause. The agency said that the change in the structure of the leadership might prevent the need for legal action. Judge Van Tatenhove gave all the concerned parties a chance to respond within 30 days due to the ongoing transition in leadership at the SEC, which may affect the case direction.
SEC’s New Leadership Could Change Course on Crypto Regulation
The move to pause the case has come at a time when there is a change of leadership at the SEC. In April 2025, the former Wall Street advisor and cryptocurrency advocate Paul Atkins became the SEC chairman. He has taken over the position from Mark Uyeda, who was earlier named the acting chair by President Donald Trump. The appointment of Atkins may signify a shift in the future attitude of the SEC towards the cryptocurrency market.
The leadership change at the commission is expected to reconsider its position on the regulation of the agency, given the aggressive measures under Gary Gensler’s tenure. During the tenure of Gensler as the head of the SEC, the commission pursued aggressive measures against various crypto platforms and exchanges. However, Atkins is viewed as a more deregulatory figure who can change the SEC’s approach to issues related to cryptocurrency.
Broader Shifts in U.S. Crypto Regulatory Landscape
The halt of the SEC aligns with the general shift in this industry’s regulations regarding virtual assets. On the same day the judge issued the halt, the DeFi Education Fund, together with the Blockchain Association and the Texas Blockchain Council, dropped a different case against the IRS. The case concerned the IRS’s “DeFi broker rule” that had intended to require decentralized finance platforms to report users’ transactions. This rule was nullified after President Donald Trump signed a bill on April 11, 2025, which repealed such regulation.
Since the change of leadership at the SEC, the agency is reconsidering some of the actions and policies previously taken. On April 5, the SEC began revisiting some of the statements issued by its staff that affected the crypto industry. This review involves examining a 2019 framework that focuses on the steps used to evaluate if digital assets qualify as investment contracts under the Howey test.
