‘Gary Gensler Didn’t Sue Anyone’: Legal Expert Slams Lawsuit by 18 States Against SEC as ‘Frivolous’

The Attorneys General of 18 U.S. states have filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) and its Chairman, Gary Gensler, accusing the agency of overstepping its regulatory authority in its actions against the cryptocurrency industry. The states argue that the SEC’s aggressive stance has unfairly targeted crypto firms, stifling innovation and undermining the stability of the industry.

States Challenge SEC’s Crypto Crackdown

The lawsuit claims that under Gensler’s leadership, the SEC has ramped up its scrutiny of major cryptocurrency companies, launching a series of lawsuits that have created uncertainty and hindered growth in the sector. 

Critics, including several high-profile economists, have previously pointed to the SEC’s aggressive stance as a major roadblock to the development of the cryptocurrency market. Author and economist Timothy Peterson had said that “As the head of an independent agency, the SEC Chair cannot be removed at the President’s discretion. To fire Gary Gensler, the President would need a “for cause” reason—such as documented inefficiency, neglect of duty, or misconduct.”

Former SEC Lawyer Defends Agency’s Actions

In response to the recently filed lawsuit by 18 U.S. states against the U.S. Securities and Exchange Commission (SEC), former SEC lawyer Marc Fagel has dismissed the legal challenge as a “frivolous, partisan joke.” He pointed out that the crypto enforcement actions taken by the SEC have largely been upheld in courts, reinforcing the legitimacy of the agency’s approach.

Fagel, however, argues that the SEC’s enforcement actions are not the product of overreach but are rather well-founded. “You can make all the noise you want about the SEC’s tactics, or lack of success on the regulatory front,” he said, “But its enforcement actions have been largely meritorious, which is why this lawsuit is a frivolous, partisan joke.”

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He also said, “See, you’re fixated on Gensler. I don’t care for the guy, but “Gary” didn’t sue anyone. The SEC has brought crypto enforcement actions that have been partially or fully successful on the merits. If you don’t like that, get Congress to change the law.”