The Crypto Freedom Alliance of Texas (CFAT) and the Blockchain Association (BA) have joined forces to take legal action against the U.S. Securities and Exchange Commission (SEC), as announced in a recent press release from the Blockchain Association. The lawsuit has been filed in a North Texas court and focuses on the SEC’s interpretation of the “dealer rule,” which CFAT and BA believe could have negative consequences for the crypto industry. The plaintiffs are seeking to overturn the SEC’s dealer rule on the grounds that it violates the Administrative Procedure Act (APA). They also criticize the SEC’s expansion of the dealer rule’s definition, arguing that it does not align with its historical meaning. The SEC’s interpretation of the dealer rule encompasses liquidity providers who act as market participants, and it requires them to register and comply with more rigorous regulations. The plaintiffs argue that this rule is too broad and vague, potentially classifying crypto market participants as dealers. BA CEO Kristin Smith states, “This is the latest example of the SEC’s unlawful attempt to regulate beyond its authority, disregarding its legal obligations to address the numerous concerns raised during the limited comment period. The Dealer Rule reflects the SEC’s anti-digital asset agenda and unlawfully redefines the boundaries of its statutory authority granted by Congress, which could push U.S. companies offshore and discourage American innovators. The Blockchain Association and the Crypto Freedom Alliance of Texas are committed defenders of the American digital asset ecosystem. To prevent further harm from this zealous regulator, we are seeking declaratory judgment and injunctive relief against the SEC to overturn their expansion of the rule and prevent its application to our industry.” Both the BA and CFAT advocate for innovative regulation that supports the growth of the crypto industry.
