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

A Texas choose struck down the Securities and Trade Fee’s (SEC) controversial “supplier rule,” handing crypto stakeholders a regulatory victory.

Earlier this 12 months, the SEC adopted a brand new rule requiring market individuals “engaged in sure supplier roles,” resembling offering liquidity, to register with the Fee and adjust to federal securities legal guidelines.

Personal fund managers, different asset managers and crypto companies rejected the brand new rule, portraying it as an overreach of rules increasing the SEC’s authority.

In March, trade 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 an analogous authorized motion in the identical district the next month.

This week, U.S. District Choose Reed O’Connor sided with the SEC in each lawsuits and struck down the brand new rule in its entirety.

The choose explains

“The Rule because it stands now de facto eliminates the excellence between ‘service provider’ and ‘supplier’ as they’ve been generally outlined for nearly 100 years. The Courtroom declines to permit such a broad enlargement of the Trade Act by means of this rule. Along with the explanations given within the associated case, the Courtroom concludes that the Supplier Rule impermissibly exceeds the SEC’s statutory authority.”

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