The Fight Against SEC’s Dealer Rule
The Crypto Freedom Alliance of Texas (CFAT) and the Blockchain Association are collaborating on a lawsuit against the U.S. Securities and Exchange Commission (SEC) over the agency’s handling of the dealer rule.
Challenging the SEC
The lawsuit has been filed in a North Texas court, targeting the SEC’s interpretation of the dealer rule, which is feared to have adverse impacts on the crypto ecosystem.
- The plaintiffs aim to challenge the SEC’s dealer rule due to alleged violations of the Administrative Procedure Act (APA).
- They criticize the SEC’s expansion of the dealer rule’s definition, stating it deviates from historical interpretations.
Expanding Dealer Rule Interpretations
The SEC’s interpretation of the dealer rule has widened the definition of “dealer” to include market participants who act as liquidity providers, mandating registration and compliance with stricter regulations.
- The plaintiffs contend that this broad and vague rule could wrongly categorize crypto market participants as dealers.
- The BA CEO, Kristin Smith, condemns the SEC’s actions, accusing the regulator of overstepping its legal boundaries and inhibiting American innovation.
Protecting the Crypto Industry
Both the Blockchain Association and the Crypto Freedom Alliance of Texas advocate for regulatory frameworks that support and encourage innovation within the crypto sector.
“This lawsuit is a necessary step to safeguard the American digital asset industry from overreaching regulatory measures and potential harm caused by the SEC’s dealer rule,” says a representative from the collaborating organizations.
Hot Take: A Stand Against Regulatory Overreach
The collaborative effort by the Crypto Freedom Alliance of Texas and the Blockchain Association illustrates a unified stance against the SEC’s attempts to implement stringent regulations that could stifle innovation and growth within the crypto industry.
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