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 a suit against the SEC in a North Texas court.
The suit focuses on the SEC’s interpretation of the “dealer rule,” which CFAT and BA say could harm crypto.
The plaintiffs want to overturn the SEC’s dealer rule due to alleged violations of the Administrative Procedure Act (APA) by the SEC.
Furthermore, the plaintiffs criticize the regulator’s expansion of the definition of the dealer rule does not match the term’s historical definition.
The SEC’s interpretation of the dealer rule broadens the definition of “dealer” to include market participants acting like liquidity providers, requiring them to register and comply with stricter regulations.
The plaintiffs criticized the rule for being overly broad and vague, potentially lumping crypto market participants in with dealers.
Says BA CEO Kristin Smith,
“This is the latest example of the SEC’s blatant attempts to unlawfully regulate outside its authority, skirting legal obligations to address the numerous concerns received during its compressed comment period. The Dealer Rule advances the SEC’s anti-digital asset crusade and unlawfully redefines the boundaries of its statutory authority granted to it by Congress, threatening to drive US companies offshore and incite fear in American innovators.
Blockchain Association and the Crypto Freedom Alliance of Texas stand as staunch defenders of the American digital asset ecosystem. Before more harm can be done by this rabid regulator, we are seeking declaratory judgment and injunctive relief against the SEC to overturn their rule expansion and prohibit its use against our industry.”
The BA and CFAT both argue for innovative regulation that helps foster the crypto industry.
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