Red States Challenge SEC Authority to Police Digital Assets (1)

Kentucky and 17 other states are challenging the Securities and Exchange Commission’s authority to regulate digital assets such as cryptocurrency.

The SEC unilaterally asserted regulatory control over digital assets by classifying them as investment contracts and treating them like stocks and bonds, according to the complaint filed Thursday in the US District Court for the Eastern District of Kentucky.

The SEC maintains that the agency therefore has the power “to regulate secondary-market sales of digital assets as securities transactions, and to require digital asset platforms both to register with the SEC as securities exchanges, dealers, brokers, and clearing agencies and ...