The Crypto Freedom Alliance of Texas (CFAT) is teaming up with the Blockchain Association (BA) to file a lawsuit against the U.S. Securities and Exchange Commission (SEC).
According to a new press release from the Blockchain Association, the two groups have filed suit against the SEC in a North Texas court.
The lawsuit focuses on the SEC’s interpretation of the “dealer rule,” which CFAT and BA say could harm crypto.
The plaintiffs seek to overturn the SEC’s dealer rule due to the SEC’s alleged violations of the Administrative Procedure Act (APA).
In addition, the plaintiffs criticize that the regulator’s expansion of the dealer rule definition does not reflect the historical definition of the term.
The SEC’s interpretation of the dealer rule expands the definition of “dealer” to include market participants who act as liquidity providers, requiring them to register and comply with more stringent regulations.
The plaintiffs criticized the rule for being too broad and vague, potentially lumping crypto market participants with dealers.
Says BA CEO Kristin Smith:
“This is the latest example of the SEC’s blatant attempts to unlawfully regulate beyond its authority, sidestepping statutory obligations to address the numerous concerns received during the short comment period. The Dealer Rule furthers the SEC’s anti-digital asset crusade and unlawfully redefines the limits of the legal authority granted to it by Congress, driving American companies abroad and instilling fear among American innovators.
Blockchain Association and the Crypto Freedom Alliance of Texas are staunch defenders of the U.S. digital asset ecosystem. Before more damage can be done by this fanatical regulator, we are seeking a declaratory judgment and injunctive relief against the SEC to reverse their rule expansion and prohibit its use against our industry.”
The BA and CFAT both advocate for innovative regulations that will help advance the crypto industry.
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