States, Crypto Groups Back Challenge to SEC Market Surveillance

Texas, Virginia, and other states, along with leading crypto industry groups, are throwing their support behind a challenge to the Securities and Exchange Commission’s new market surveillance tool.

Nineteen states, represented by Republican attorneys general, argue the Consolidated Audit Trail would be an unprecedented threat to the privacy and security of millions of people. The SEC—and anyone who manages to hack the CAT database—will be able to spy on Americans’ trading activity, the states said.

“Given the increasing number of government databases being targeted by hackers, including agents of the Chinese Communist Party, the CAT will be as tempting a ...