Crypto Freedom Alliance of Texas and Blockchain Association filed a motion on May 17 to vacate the U.S. Securities and Exchange Commission (SEC)’s new Dealer Rule. The plaintiffs’ counsel argues that the SEC’s expanded definition of “dealer” exceeds its statutory authority under the Securities Exchange Act, particularly affecting the digital asset industry. The brief asserts that the SEC failed to address significant industry comments, lacked specific economic analysis for digital assets, and departed from established interpretations without adequate explanation. They claim this rulemaking process is arbitrary, capricious, and violates the Administrative Procedure Act (APA).
The SEC’s new rule would impose dealer registration requirements on digital asset market participants, potentially stifling innovation and burdening the industry with unsuitable regulations. The plaintiffs emphasize that the SEC did not provide a clear framework for digital asset participants to comply with the new rule and failed to analyze its economic impact on these markets. Consequently, they seek to have the Dealer Rule set aside to protect the growth and functionality of the digital asset industry.
