LITTLE ROCK, Ark. – Arkansas Attorney General Tim Griffin has joined a multistate coalition opposing a proposed Security and Exchange Commission rule on cryptocurrencies, saying those rules should come from Congress.
Griffin joined with 12 other states attorneys general in sending a letter to the SEC opposing a proposed rule that would expand its regulation role.
Current SEC rules allow the agency to regulate investment advisors who directly or indirectly holds a client’s fund or securities. The newly proposed rule would give the SEC authority to expand its regulation to non-securities, including cryptocurrencies.
In the letter, Griffin said the SEC should decline the proposed rule because it does not have the legal authority to regulate assets that are not securities. The attorney general made it a point that regulation of crypto is for Congress and the states to decide.
Instead of adopting the rule, the group AGs suggest that the SEC wait for Congress to provide direction.
“Congress authorized the SEC to regulate securities,” Griffin wrote in the letter. “But it wants to go beyond that to aggressively reinterpret its authority to reach non-securities like artwork, real estate and cryptocurrencies. Congress never gave it that authority, and its proposed rule would violate clear United States Supreme Court precedent.”
The attorneys general also content the proposed rule would put federal regulations on state-charted trust companies and bank entities, raising federalism concerns.
Griffin closed the letter by saying that the SEC has not allowed the opportunity to fully evaluate the proposed rule. The proposed rule was published March 9 with comments due by May 8, which was the date the letter from Griffin and the other AGs was dated.
Instead of making what the attorneys general called a “massive change” all at once, the group suggested the SEC give states and other stakeholders a chance to evaluate the changes.
Attorneys general from Alaska, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, North Dakota, Ohio, Tennessee, Texas and Utah joined with Griffin. Arkansas is the first state listed in the letter and Griffin’s in the first signature.