By Anne Sherry, J.D.
Two crypto industry groups are suing the SEC over the agency’s Dealer Rule, which requires market participants who perform dealer functions to register with the Commission and join FINRA and the SIPC. Crypto Freedom Alliance of Texas and Blockchain Association cite six alleged violations of the Administrative Procedure Act in seeking an injunction blocking the rule. In the plaintiffs’ view, the new rule “represents simply the latest example of the Commission’s attempts to thoughtlessly apply rules geared toward traditional financial markets to the digital assets industry” (Crypto Freedom Alliance of Texas v. SEC, April 23, 2024).
Parties. Both plaintiffs are 501(c)(6) nonprofits devoted to promoting innovation in the digital assets industry. CFAT specifically advocates for the responsible development of crypto regulation in Texas, believing the state should play a leading role in fostering innovation and economic growth using blockchain technology. Blockchain Association’s members are software developers, infrastructure providers, exchanges, custodians, investors, and others supportive of the blockchain ecosystem. CFAT is a co-plaintiff in a pending lawsuit, also in the Northern District of Texas, that challenges SEC’s regulatory claim over crypto assets.
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