According to a report by the Wall Street Journal, two major US organizations in the cryptocurrency industry, the Blockchain Association and the Texas Crypto Freedom Alliance, have filed a lawsuit against the SEC for enacting rulemaking that expands the definition of securities dealer to include those who act as liquidity providers in DeFi protocols. He filed a lawsuit against.
US institutions claimed that the SEC's latest expansion of the definition of securities dealer was “arbitrary”.
The Blockchain Association and the Texas Crypto Freedom Alliance said in their complaint to a federal court in Texas that the SEC overstepped its authority and approved an arbitrary and capricious rule.
Institutions that play an active role in the crypto industry said in the lawsuit that the new rule expanding the definitions is unclear, its scope is too broad and does not explain its impact on cryptocurrency market participants.
The Blockchain Association called the new dealer definition an “unenforceable rule” that would hinder innovation in the digital asset ecosystem.
The SEC's new dealer definition sparked backlash from many in the cryptocurrency community, including SEC members Hester Pierce and Mark Uyeda, who opposed the rule in a 3-2 vote.