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Legal Battle Between Blockchain Association and Crypto Freedom Alliance Against SEC
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.
SEC Adopts New Rules to Redefine “Dealer”
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.
Challenges Against SEC’s Regulatory Expansion
- 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.
- The expansion creates a vague and burdensome regulatory environment for businesses involved in digital asset trading.
- The lawsuit seeks a court order to overturn the expansion of the Dealer Rule based on violations of the Administrative Procedure Act (APA).
Industry Concerns and Legal Action
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.” The lawsuit filed aims to prevent further harm caused by what they perceive as an overreaching regulator.
Advocacy for Innovation and Development
The Blockchain Association and the Crypto Freedom Alliance of Texas represent a significant portion of the cryptocurrency industry, advocating for a national policy framework within the U.S. that fosters local innovation and responsible development in the digital asset space.
SEC’s Regulatory Actions Against Crypto Companies
Over the past year, the SEC has filed numerous lawsuits against crypto firms, with SEC Chair Gary Gensler consistently asserting that most cryptocurrencies should be classified as securities. Many industry players and advocacy groups have called on the SEC to establish clear regulatory guidelines to foster innovation within the United States.
“[T]here still are those who would like to whittle away at the SEC’s disclosure regime,” said the SEC chair.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
