State officials attempting to protect crypto from the SEC
OKLAHOMA CITY (KFOR) — Oklahoma's Attorney General has included the state in a lawsuit with 17 other states, demanding a federal regulating body not regulate digital or cryptocurrency.
The lawsuit has been around for several months but Attorney General Gentner Drummond announced this week that Oklahoma is hopping on.
Essentially the lawsuit points out that the Security Exchange Commission (SEC) is overstepping when it comes to crypto companies.
In it, they allege that the SEC is treating cryptocurrency like it is the stock exchange, but they said it's completely different.
The attorney generals in many states said that control should be with the states.
“We should be encouraging this vibrant, new digital asset industry for its ability to innovate, create jobs, and make financial services more accessible for millions of Americans,” Drummond said. “This regulatory overreach by the Biden Administration means to reach into the wallets of hardworking Oklahomans, and we will oppose it vigorously.”
Several people have said states shouldn't back crypto at all. Recent headlines have shown police departments and others warning people of the many scams used with crypto at the center of it.
Just recently crypto company, FTX, went bankrupt in a matter of days and lost customers billions of dollars.
"It is one hundred percent a risk, it doesn't have insurance," said Alicia Wade, Chair of Oklahoma's Bankers Association.
Banks are regulated so if things go sideways, as long as it's FDIC, it should be insured. But with crypto, that isn't the case.
Wade said banks would probably look into pairing up with crypto if regulations did exist and it was safer.
"The problem is because it's so loose, our regulators don't want us to marry this crypto and blockchain into banking," said Wade.
However, others applaud the AG's efforts, like those at the Oklahoma Bitcoin Association.
"There's not a one-size-fits-all regulatory approach to this," said Storm Rund, President of the Oklahoma Bitcoin Association.
Rund said that they're not at all against regulations but would like more legislation if anything.
"That's what everybody's trying to figure out right now is who is the proper body to actually regulate this industry and what are going to be the checks on that power," said Rund.
The lawsuit alleges that the agency is guilty of “gross government overreach” against the crypto space. The plaintiffs alleged that the SEC did not respect the allocation of authority.