Defending the Digital Asset
Industry in the Courts

 

At Blockchain Association, we believe in protecting innovation and fostering a regulatory environment that supports the growth of the crypto industry. That’s why we, along with the Crypto Freedom Alliance of Texas (CFAT), are challenging the SEC’s recently finalized Dealer Rule, which we believe unfairly targets digital asset markets and stifles technological advancement. Below is more information on our litigation that we will update regularly to keep you informed about the progress and developments in our case against the SEC.

The U.S. Securities and Exchange Commission’s (SEC) recently finalized Dealer Rule strays dramatically from the long-standing and well-settled meaning of the term originally established as part of the Securities Exchange Act of 1934. In our view, this unlawful expansion stands to cause irreparable damage to the tens of millions of American consumers and businesses participating in digital asset trading.

To stop the SEC’s continued attacks against our industry, we and our co-plaintiff have sued the agency to overturn this radical expansion of SEC authority that we believe poses a serious threat to the digital asset industry and future of American innovation.

Securities

U.S. Administrative Procedure Law Exists for a Reason. The SEC Must Follow It

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THE COMPLAINT

Our lawsuit asks the court to overturn the Dealer Rule. Our complaint alleges that the SEC exceeded the authority granted to it by Congress, and violated the Administrative Procedure Act (APA) by refusing to substantively engage with the many commenters who submitted concerns and questions over how the rule would apply to digital asset technology.

Lawsuit Timeline

Click timeline items to see definitions.

FEBRUARY 2024

SEC Adopts Dealer Rule

The SEC adopts the “Dealer Rule,” which broadens the definition of “dealer” to include more digital asset market participants. Dealers must register with the SEC, join a self-regulatory organization, and comply with federal securities laws​​.

MARCH 18, 2024

Managed Funds Association (MFA) Sues the SEC

The National Association of Private Fund Managers (NAPFM), the Alternative Investment Management Association (AIMA), and the Managed Funds Association (MFA) file a lawsuit against the SEC, challenging the new “Dealer Rule.”. They argue that the rule exceeds the SEC’s statutory authority granted by Congress and is vague and overbroad​​.

APRIL 23, 2024

Blockchain Association Sues the SEC

Blockchain Association (BA) and the Crypto Freedom Alliance of Texas (CFAT) file a lawsuit against the SEC. They ask the court to overturn the SEC’s the “Dealer Rule,” arguing that it unlawfully extends the SEC’s regulatory authority and creates an unclear regulatory environment for digital asset market participants​ in violation of the Administrative Procedures Act.

DEFINITION

Filing of Complaint

The initiation of a lawsuit by submitting a formal written statement of the plaintiff’s claims and demands to the court.

MAY 17, 2024

BA Files its Motion for Summary Judgment

A motion for summary judgment allows parties to request the court to rule in their favor without a full trial, arguing that there are no material facts in dispute.

DEFINITION

Motion for Summary Judgment

A request made to the court to rule in favor of one party without a trial, asserting that there are no factual disputes and the law is on its side.

June 26, 2024

SEC Files its Opposition and Cross-Motion for Summary Judgment.

DEFINITION

Opposition

A formal response filed by a party to counteract a motion or argument presented by the opposing party in court.

July 29, 2024

BA and CFAT file combined reply brief

The combined reply brief is in support of their motion for summary judgment and opposition to the SEC’s motion for summary judgment.

August 30, 2024

SEC files reply brief

The SEC reply brief is used to reiterate its arguments and address BA and CFAT’s combined opposition brief.

DEFINITION

Reply

The Reply is the last chance a party has to reiterate their arguments on summary judgment and address the arguments made by the other party in its Response.

RECENT MEDIA

POWER OF THE COURTS

America’s judicial system plays a crucial role in shaping the law, and presents an important avenue for resolving novel legal questions surrounding digital asset technology. 

As regulators struggle to address paradigm-shifting blockchain technology, participants in the digital asset industry are increasingly turning to the court system to gain legal and regulatory clarity. Cases involving major exchanges like Coinbase, Consensys, and Ripple highlight how courts are being utilized to resolve fundamental issues. Through these rulings, the courts have the power to set precedents, safeguard constitutional rights, and ensure that innovation in digital assets can thrive despite regulatory uncertainty. This judicial oversight is beneficial because it provides a balanced and nuanced approach to regulation, fostering a legal environment that can adapt to rapid technological advancements.

Relevant documents

The crypto industry faces wide-ranging public policy challenges, get in touch with our communications team. All press inquiries can be addressed to [email protected].

PDF

April 23, 2024

Filed Lawsuit (pdf)

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PDF

May 17, 2024

Motion for Summary Judgement (pdf)

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PDF

July 29, 2024

Combined Reply Brief (pdf)

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PDF

SEC’s Reply Brief (pdf)

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