The Blockchain Association and the Crypto Freedom Alliance of Texas have filed a legal complaint against the U.S. SEC regarding a new rule that could impact the cryptocurrency industry. The SEC’s rule, adopted in February, extends federal securities laws to market participants with significant roles in providing liquidity, including cryptocurrency transactions.

The complaint, filed in a Texas district court, alleges violations of the Administrative Procedures Act (APA), which governs federal agency rulemaking. Blockchain Association CEO Kristin Smith stated, “Before more harm can be done by this regulator, we are seeking declaratory judgment and injunctive relief against the SEC to overturn their rule expansion and protect our industry.”

The rule applies to crypto assets classified as securities or government securities, with exceptions for assets valued under $50 million, such as defi. The new rule has faced backlash from the crypto industry, prompting legal action from the Blockchain Association and the Crypto Freedom Alliance of Texas.

The SEC defended its actions, stating that rulemaking is conducted within its mandates and legal framework, and it intends to uphold the final dealer rules in court. This lawsuit is part of a series of legal challenges against the SEC in recent years, with various industry groups and companies taking legal action to address regulatory concerns.

In conclusion, the legal action taken by the Blockchain Association and the Crypto Freedom Alliance of Texas highlights the ongoing regulatory challenges faced by the cryptocurrency industry. It underscores the importance of clarity and consistency in regulatory frameworks to support innovation and growth in the digital asset sector.

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