- The challenge seeks to reverse this widened interpretation of digital assets dealers.
- The SEC disregarded public comments and failed to do an economic analysis as per claims.
A lawsuit has been filed against the U.S SEC by the Blockchain Association and the Crypto Freedom Alliance of Texas (CFAT). An expanded definition of a “dealer” in the context of digital assets is the target of the lawsuit, which challenges a recent regulation. The challenge seeks to reverse this widened interpretation and was filed in the Northern District of Texas District Court.
The plaintiffs contend that the proposed change may unjustly classify ordinary people who engage in digital assets as dealers. The rule’s emphasis on trading’s consequences rather than transactions’ characteristics is the source of this worry.
Revised Dealer Definition
Their main argument is that the law doesn’t make a distinction between dealers and regular traders who work for their accounts. According to the claims made in the case, the SEC disregarded public comments and failed to do an economic analysis as required by law, therefore evading essential processes.
With an emphasis on a practical evaluation of securities trading operations, the SEC adopted the revised dealer definition in February by a 3-2 vote. The regulator stood by its judgment, saying that crypto dealers may have an unfair edge over more conventional financial companies if crypto wasn’t included in this classification.
Some have said that the SEC’s stance on digital assets is contradictory. Uncertainty has spread throughout the sector since the commission has not yet provided a clear definition of which transactions using digital assets may be considered securities transactions. Critics claim the SEC deploys ad hoc ways to designate digital assets as securities, adding to regulatory complexity.
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