Blockchain Association and Crypto Activists Take Legal Action Against SEC Over ‘Dealer Rule’

Crypto News- The Blockchain Association (BA) and the Crypto Freedom Alliance of Texas (CFAT) have made a bold move, unveiling a new lawsuit against the United States Securities and Exchange Commission (SEC) in the Northern District of Texas. This legal action, as per their statement, aims to challenge the SEC’s recent expansion of the “Dealer Rule,” which they argue is stifling innovation within the U.S. digital asset market.

Blockchain Association and Crypto Activists Take Legal Action Against SEC Over ‘Dealer Rule’

Announced on April 23, the BA took the lead in bringing this lawsuit forward, highlighting their concerns about the SEC’s broad interpretation of the term “dealer” within the Securities Exchange Act of 1934. According to them, this expansion, driven by new rules adopted in February, forces more crypto market participants to register, join self-regulatory organizations, and comply with federal securities laws, creating a regulatory environment that is both vague and burdensome for businesses involved in digital asset trading.

Kristin Smith, CEO of the Blockchain Association, didn’t mince words, labeling the SEC’s actions as blatant overreach. She accused the SEC of unlawfully redefining its boundaries of authority, potentially driving U.S. companies offshore and instilling fear in American innovators.

Legal Challenge: Allegations of Regulatory Neglect and the Fight for Crypto Innovation

The lawsuit itself alleges that the SEC failed to adequately address public concerns during the comment period and neglected to assess the potential negative impacts of the rule, a violation of the Administrative Procedure Act (APA). Seeking both declaratory judgment and injunctive relief, the plaintiffs aim to overturn the expansion of the rule and prevent further damage caused by what they term a “rabid regulator.”

Representing a significant portion of the cryptocurrency industry, including investors, companies, and projects, the BA and CFAT advocate for a national policy framework within the U.S. that promotes local innovation and responsible development within the digital asset space.