SEC hit by lawsuit brought by Blockchain Association and Crypto Freedom Alliance of Texas

Blockchain Association, CFAT file lawsuit against SEC on Tuesday.
Groups challenge regulator’s “misguided attacks” on digital asset industry.
Crypto trade groups take issue with SEC move to broaden definition of ‘dealer’ of securities.

Two crypto industry groups Blockchain Association (BA)and the Crypto Freedom Alliance of Texas (CFAT) have filed a lawsuit against the Securities & Exchange Commission (SEC) in a federal court in Texas.

The two groups are challenging the SEC’s new rule that broadens the definition of who the regulator considers as a “dealer” of securities.

SEC faces lawsuit on ‘misguided attacks’ in crypto industry

According to an update on the Blockchain Association website, two crypto groups have filed a lawsuit against the US financial regulator in the Northern District of Texas. The BA and CFAT challenge the SEC’s “misguided attacks” on the US digital asset industry. It is likely that here the two crypto groups refer to enforcement action and the regulator’s lawsuits against Ripple and Coinbase, among other firms.

In the official announcement, the groups slam the SEC for its “arbitrary and capricious rule making” and seek a court order to strike down the Dealer Rule. The groups argue that the SEC’s various Administrative Procedure Act (APA) violations prevent crypto industry participants from operating within communicated rules.

The BA and CFAT allege that the SEC has violated APA by “unlawfully” expanding the regulator’s interpretation of the term “dealer,” which is a part of the Securities Exchange Act of 1934.

The development has an impact on crypto traders since the SEC’s new rule stands to impact tens of millions of Americans and digital asset trading businesses. In expanding the term, the regulator likely applies a “vague,” “broad” standard to market participants, some of which may completely differ from what the definition of the word has been for decades.

The groups are seeking a declaratory judgment and a legal remedy to stop the regulator from making the rule change and enforcing it (injunctive relief).

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.