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The U.S. Securities and Exchange Commission (SEC) suffered a major blow on Thursday when a federal court in Texas ruled that its crypto policy was illegal and exceeded the authority of the regulator.
Judge Reed O’Connor You can also get a grant The SEC granted summary judgment in favor of the Blockchain Association. In April, Over the Agency’s Expansion of the Legal Definition of the Word “dealer” Include DeFi Protocols and transactions
It is used to describe non-custodial encryption applications in networks like Ethereum The following are some examples of how to get started: Solana The trading platform allows users to borrow, buy, or sell crypto assets, without a third-party, like a bank. The SEC’s interpretation of the dealer rule would have required DeFi projects and users to register as securities exchanges and brokers—the same standards applied to stock exchanges and Wall Street traders.
Judge O’Connor determined today not just that the Blockchain Association's lawsuit had merits—but that its argument was so compelling that the issue could be settled without proceeding to a trial.
It is time for the SEC to vacate its crypto-related offices and put them aside O’Connor found that the SEC violated long-standing norms by modifying its dealer rule in early this year. The judge found in particular that by changing its dealer rules, the SEC broke long-standing norms, as it conflated everyday DeFi brokers with professional financial agents.
“The Rule as it currently stands de facto removes the distinction between ‘trader’ and ‘dealer’ as they have commonly been defined for nearly 100 years,” O’Connor penned a letter on Thursday.
The Blockchain Association hails the SEC decision as a major victory for the fight against its hostile crypto policy.
“The Dealer Rule was an attempt by the SEC to advance the agency’s anti-crypto crusade,” Blockchain Association CEO Kristin smith said in a press release shared with Decrypt. “Following today’s ruling, the agency’s overreach is rolled back and the digital asset industry is protected from this unlawful rule.”
SEC has not responded immediately to DecryptRequest for comments regarding the court’s decision today.
Today’s decision was handed down just minutes after SEC Chair Gary Gensler—the driving force behind the agency’s Crypto Crackdown—announced he plans to resign in the wake of Donald Trump’s re-election. Gensler is a Democrat who was appointed by Joe Biden. You can also read about the importance of this in our article He will step down on the 20th of January, which is also when Trump takes office.
Trump promised To appoint a SEC chairman who is ardently supportive of the crypto industry. The SEC’s pending cases will be handled differently by a new chair. The Lawsuits Many of America’s leading crypto projects and firms have been targeted.