US courts strike down SEC broker-dealer rule, big victory for crypto

Great news for the crypto industry! A recent ruling by a US court has struck down the SEC broker-dealer rule, a big win for the crypto community. This rule, which broadened the definition of a “dealer” to include liquidity providers and automated market makers with over $50 million in capital, has been deemed excessive by US District Judge Reed O’Connor.

Marisa Tashman Coppel, legal head at the Blockchain Association, hailed this decision as a “huge win” for the blossoming crypto industry. Despite this victory, the SEC still has the option to appeal the verdict and potentially reintroduce the broker-dealer rule in the future.

The crypto industry has been grappling with regulatory challenges, particularly the SEC’s broker-dealer rule change introduced in February 2024. This change would have imposed stringent regulatory requirements on numerous crypto projects, especially decentralized networks that lack central oversight. This controversial move was met with criticism from industry figures, investors, and even SEC commissioners like Mark Uyeda.

Critics argued that the SEC had overreached its jurisdiction and was stifling innovation within the sector. In response to this, crypto industry advocacy groups, including the Blockchain Association and the Crypto Freedom Alliance of Texas, filed a lawsuit against the SEC, accusing them of regulatory overreach.

Overall, this legal victory is a significant milestone for the crypto industry, showcasing the community’s resilience and commitment to innovation despite regulatory challenges.