Recently, the U.S. securities regulator SEC New rules adoptedsignificantly expanding the definition of “dealer” in the Securities Exchange Act.
This change is likely to attract a wide range of market participants who have never been considered resellers before. The new rules focus on the late effects of trading activity, unlike traditional client-facing approaches.
This shift has been met with criticism and concerns from various areas of the financial industry, especially the digital asset market.
Texas Crypto Freedom Alliance and Blockchain Association Take Action
In response to the SEC’s new regulations, the Cryptocurrency Freedom Alliance of Texas (CFAT) and the Blockchain Association have submit Complaints for declaratory and injunctive relief. The indictment names the SEC and its chairman, Gary Gensler, as defendants.
The plaintiffs argue that the new rules exceed the commission’s statutory authority and represent uninformed and impulsive decision-making. They also claimed that the rule could have an immeasurable impact on digital asset industry stakeholders.
The digital asset industry has unique characteristics that distinguish it from traditional financial markets. These features include the use of decentralized ledgers and open source software to facilitate transactions.
Complainants argue that the SEC’s new rules do not take into account these unique characteristics. They believe that applying a regulatory framework designed for traditional markets to the digital asset industry could have serious consequences.
The complaint highlights several issues specific to the digital asset industry. These concerns include the potential for reduced liquidity, increased volatility, and reduced price efficiency in digital asset markets.
Complainants also argue that the rule could harm competition and stifle innovation. They insist that this prevents market participants from using decentralized finance (DeFi) protocols, which are critical to the development of next-generation internet technologies such as Web3.
Voice requests in tweets
in a series of tweetsMarisa Tashman Coppel, Director of Legal Affairs Blockchain Association, A list of bold demands was made. The request was aimed at countering what she called “overreach” by the Securities and Exchange Commission (SEC).
Coppel, chief legal officer of blockchain intelligence firm TRM Labs, outlined the “relief” her organization is seeking. One of the key demands highlighted in her tweet was for the SEC to “commit not to continue one-sided attempts to expand its jurisdiction over digital assets without a proper rulemaking process.”
Additionally, Blockchain Association CEO Kristin Smith point out The new rules are an example of the SEC engaging in overt regulation outside its purview. She added that the Dealers Rule promotes the SEC’s anti-crypto campaign. As such, it unlawfully redefines the boundaries of the regulator’s statutory authority granted by Congress.
Smith warned that this could force U.S. companies overseas and stoke fears among U.S. innovators.
The Blockchain Association and the Texas Cryptocurrency Freedom Alliance are staunch defenders of the U.S. digital asset ecosystem. They seek declaratory judgment and injunctive relief against the SEC to overturn its rule expansion and enjoin its use against the industry.
The Blockchain Association is the collective voice of the cryptocurrency industry, with members including the industry’s top players, leading companies and investors. They work together to support future progress, enabling national policies, and regulatory frameworks that promote cryptoeconomic innovation.
As the case progresses, the results have potential implications for the future of the digital asset regulatory industry.
