Attorneys General from Multiple U.S. States: SEC is Expanding the Definition of "Investment Contract"

Law enforcement officials from Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota and Texas submitted a joint amicus curiae (or friend of the court) statement in the U.S. Securities and Exchange Commission's lawsuit against Kraken on Thursday. The document states that these states are not supporting the exchange but opposing federal regulators. If the SEC wins its case, it could prioritize state consumer protection laws as well as state regulations surrounding cryptocurrencies. These attorneys general argue that even an SEC lawsuit could harm consumers' interests; they believe that this agency is expanding the definition of "investment contracts," and cryptocurrencies do not automatically fall under securities.