A Texas-based nonprofit focused on digital asset policy has filed a federal lawsuit accusing the U.S. Securities and Exchange Commission of unlawfully asserting sweeping authority over cryptocurrency markets without clear authorization from Congress. The case was brought in the U.S. District Court for the Northern District of Texas and argues that the SEC has effectively claimed jurisdiction over most digital assets by treating them as securities, despite the absence of a specific statutory mandate defining cryptocurrencies as such. The plaintiffs contend that this amounts to regulation by enforcement rather than through the formal rulemaking process required under the Administrative Procedure Act. The lawsuit forms part of a broader, coordinated pushback by Republican-led states and crypto-aligned groups against the SEC’s current approach to crypto regulation. Parallel litigation by an 18-state coalition of attorneys general similarly alleges that the SEC has exceeded its delegated powers by classifying many digital assets as “investment contracts” and imposing securities law requirements on crypto firms without going through notice-and-comment rulemaking. These challenges are significant because they directly test the scope of the SEC’s authority over digital assets, with potential implications for how cryptocurrencies are classified, which federal agency takes the lead in overseeing them, and how future enforcement and compliance obligations for U.S. crypto businesses are defined.

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