Table of Contents

• Challenging the Expanded Interpretation of Digital Assets Dealers
• Lawsuit Against the SEC for Lack of Economic Analysis

A lawsuit has been filed by the Blockchain Association and the Crypto Freedom Alliance of Texas (CFAT) against the U.S. SEC. The lawsuit targets a recent regulation that introduces a broader definition of a “dealer” in the realm of digital assets. The lawsuit aims to challenge and reverse this expanded interpretation and has been filed in the Northern District of Texas District Court.

The plaintiffs argue that the proposed change could unfairly categorize regular individuals involved in digital assets as dealers. Their concern stems from the rule’s focus on the consequences of trading rather than the characteristics of transactions.

Redefined Dealer Classification

The primary contention revolves around the lack of differentiation between dealers and ordinary traders operating for personal accounts. Allegations in the case suggest that the SEC ignored public feedback and skipped the mandated economic analysis, bypassing crucial procedures.

In February, the SEC approved the revised dealer definition with a 3-2 majority vote, emphasizing a practical assessment of securities trading activities. Defending its decision, the regulator highlighted the potential competitive advantage crypto dealers might have over traditional financial institutions if cryptocurrencies were excluded from this classification.

Critics have pointed out inconsistencies in the SEC’s approach to digital assets. The absence of a clear definition from the commission on which digital asset transactions qualify as securities transactions has created uncertainty in the industry. Critics argue that the SEC’s categorization of digital assets as securities appears arbitrary, contributing to regulatory intricacies.

Highlighted Update in the Crypto Space:

Binance has launched Spot Copy Trading, offering automated trading benefits.