Texas Judge Tosses SEC’s Controversial ‘Dealer Rule’ After Lawsuit From Crypto Groups

A Texas decide tossed the Securities and Trade Fee’s (SEC) controversial “vendor rule,” handing crypto stakeholders a regulatory victory.

Earlier this 12 months, the SEC adopted a brand new rule requiring market members “who interact in sure vendor roles,” like offering liquidity, to register with the Fee and adjust to federal securities regulation.

Non-public fund managers, different asset managers and crypto companies blasted the brand new rule, portray it as an excessively broad regulatory overreach that expanded the SEC’s authority.

In March, commerce associations representing personal fund managers, different asset managers and managed funds filed a lawsuit in opposition to the SEC within the U.S. District Courtroom for the Northern District of Texas.

Crypto stakeholders, represented by the Crypto Freedom Alliance of Texas (CFAT) and the Blockchain Affiliation (BA), launched a similar legal action in the identical district the next month.

This week, U.S. District Choose Reed O’Connor sided against the SEC in both lawsuits and vacated the brand new rule in its entirety.

Explains the decide,

“The Rule because it presently stands de facto removes the excellence between ‘dealer’ and ‘vendor’ as they’ve generally been outlined for practically 100 years. The Courtroom refuses to permit such a broad growth of the Trade Act by the use of this Rule. Along with the explanations supplied within the Associated Case, the Courtroom concludes that the Vendor Rule impermissibly exceeds the SEC’s statutory authority.”

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