A lawsuit has been filed against the U.S. Securities and Exchange Commission (SEC) by a coalition of state attorneys general and the DeFi Education Fund. The suit, lodged in the U.S. District Court for the Eastern District of Kentucky, claims that the SEC is overreaching its authority in enforcing actions against crypto exchanges. It asserts that the SEC’s regulatory stance towards digital assets is unlawful, characterizing it as 'unlawful executive action' and a violation of the Administrative Procedures Act. Furthermore, the lawsuit highlights the SEC's jurisdictional overreach as encroaching on states' rights to regulate the industry on their own. The plaintiffs also reference the major questions doctrine, which limits federal agencies' litigation scope to matters explicitly authorizes by Congress. Miller Whitehouse-Levine, CEO of the DeFi Education Fund, criticized the SEC for hindering the growth of the crypto sector. In response, an SEC spokesperson emphasized collaborative efforts with state regulators in tackling misconduct in crypto markets, while SEC Chair Gary Gensler pointed out ongoing concerns around investor protection and the dubious utility of many crypto assets.

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