Challenging the SEC: Blockchain Association’s Lawsuit Against the U.S. Securities and Exchange Commission
Blockchain Association, a trade association representing stakeholders in the cryptocurrency and blockchain industry, has taken a bold step by filing a lawsuit against the U.S. Securities and Exchange Commission (SEC). In an interview with “Bloomberg Crypto,” Kristin Smith, CEO of Blockchain Association, detailed the reasons behind their legal challenge.
The lawsuit, filed in collaboration with Crypto Freedom Alliance of Texas, challenges the SEC’s new dealer rule, which the association argues could have detrimental effects on the cryptocurrency space, particularly decentralized finance (DeFi). The rule expands the definition of who qualifies as a dealer, potentially encompassing individuals who trade on their own account, disrupting the traditional customer-client relationship.
Smith criticized the SEC’s approach as vague and argued that the rulemaking process ignored the concerns of the crypto industry. The lack of clarity and failure to address industry feedback during the comment period are central to the association’s legal challenge, citing violations of the Administrative Procedure Act.
The potential consequences of the SEC’s rule are concerning, according to Smith. The uncertainty created by the rule has already led companies within the Blockchain Association to halt hiring and delay product launches in the U.S., stifling innovation and creating compliance challenges for market participants.
The Blockchain Association hopes that their lawsuit, alongside another led by the Managed Funds Association, will prompt the SEC to reconsider the rule’s impact on cryptocurrency technologies and trading. Smith emphasized the need for regulatory clarity that supports technological innovation within the industry, expressing hope that the lawsuit will lead to a more favorable regulatory environment.
The lawsuit against the SEC marks a significant move by the Blockchain Association to advocate for policy and regulatory solutions that foster innovation and sustainability in the cryptocurrency and blockchain sector. Stay tuned for updates on this developing story.
