According to a report by CoinDesk, several US state attorneys general believe that the US Securities and Exchange Commission (SEC) exceeded its authority when it filed a lawsuit against the cryptocurrency exchange Kraken. The agency is attempting to argue that it should fall under the jurisdiction of individual states.
State law enforcement officials from Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota, and Texas, along with some industry lobbyists and other participants, submitted a joint amicus brief on Thursday (29th) regarding the SEC’s lawsuit against Kraken. The attorneys general argue that the lawsuit filed by the SEC could even harm consumers. They believe that the regulatory agency is expanding the definition of “investment contract” and asserting that cryptocurrencies “are not necessarily securities.”
This document echoes some arguments made by Kraken and other cryptocurrency companies, pointing out that the stance of these states is not to support Kraken but to oppose the actions of the SEC.
The document states that in the past, cases from these states have helped clarify the definition of investment contracts. Furthermore, if the SEC were to win the case, it could preempt consumer protection laws in these states, as well as state regulations regarding cryptocurrencies.
