SEC Sued by Crypto Industry Groups Over Definition of ‘Dealer’ in Securities
The Blockchain Association and the Crypto Freedom Alliance of Texas (CFAT) have taken legal action against the United States Securities and Exchange Commission (SEC), filing a lawsuit in the Northern District of Texas.
The lawsuit aims to challenge the SEC’s recent expansion of the “Dealer Rule,” which the industry groups argue is stifling innovation in the U.S. digital asset market.
The BA and CFAT assert that the SEC exceeded its authority by implementing a broad interpretation of the term “dealer” within the Securities Exchange Act of 1934.
In February, the SEC adopted new rules that redefine “dealer” and “government securities dealer.”
As a result, more participants in the crypto market are required to register, join a self-regulatory organization, and comply with federal securities laws.
According to the lawsuit, this expansion creates a vague and burdensome regulatory environment for businesses involved in digital asset trading.
The plaintiffs allege that the SEC failed to adequately address public concerns raised during the limited comment period and neglected to assess the potential negative impacts of the rule.
Kristin Smith, CEO of the Blockchain Association, criticized the SEC for attempting to regulate outside its authority, stating that the Dealer Rule is part of the SEC’s “anti-digital asset crusade.”
She believes that the rule unlawfully redefines the boundaries of the SEC’s statutory authority granted by Congress, which could drive U.S. companies offshore and instill fear in American innovators.
The lawsuit seeks a court order to overturn the expansion of the Dealer Rule based on violations of the Administrative Procedure Act (APA).
The APA ensures fair and transparent
Read more on cryptonews.com
