On February 19, the SEC filed a motion to withdraw its appeal against a ruling that limits the application of securities laws to cryptocurrency users and DeFi services.
1/ Today marks a complete victory for us – and the broader industry – in our lawsuit against the SEC over the dealer rule.
The SEC voluntarily dismissed its appeal of the lawsuit over the dealer rule brought by us and @CryptoFreedomTX.https://t.co/ajuJdrLOI4 pic.twitter.com/pbHClVefud
— Blockchain Association (@BlockchainAssn) February 19, 2025
In February 2024, the Commission broadened the definition of “dealer,” bringing more financial operations, including those involving cryptocurrencies, under its jurisdiction.
Under the provisions, market participants managing and owning cryptocurrencies worth over $50 million were required to register their status with the agency. The rules were expected to take full effect in April 2025. Commissioners Mark Uyeda and Hester Peirce opposed their adoption.
The Blockchain Association and Crypto Freedom Alliance of Texas filed a lawsuit against the SEC, seeking to overturn the agency’s decision. The plaintiffs argued that the Commission violated the Administrative Procedure Act by unlawfully expanding the interpretation of the term “dealer.” The potential impact of the agency’s initiative on the industry was described as “catastrophic” in their statement.
In November, a Texas District Court ruled that the SEC had overstepped its authority by applying “dealer rules” to cryptocurrencies. In January, the Commission filed an appeal, which it has now withdrawn.
“Today we achieved a complete and final victory in the case against the SEC over the dealer rules. With the Commission voluntarily dismissing its appeal, the crypto industry can breathe a sigh of relief. Our industry has a bright future. Let’s keep building,” said Blockchain Association CEO Kristin Smith.
On January 20, SEC Chairman Gary Gensler resigned, having been accused by the community of waging a “war” against the industry.
Uyeda became the interim head of the Commission. Peirce took charge of the cryptocurrency task force. One of the structure’s priorities, she noted, was to classify which digital assets should be considered securities.
President Donald Trump nominated Paul Atkins, a former commissioner and cryptocurrency advocate, for the position of SEC Chairman.