The Blockchain Association (BA) and the Crypto Freedom Alliance of Texas (CFAT) have taken legal action against the Securities and Exchange Commission (SEC) by filing a lawsuit in the Northern District of Texas. The lawsuit aims to challenge the SEC's "Dealer Rule" expansion, which the plaintiffs argue poses a threat to the American digital asset industry and innovation.

According to the complaint, the SEC's expansion of the Dealer Rule is deemed unlawful and arbitrary, violating the Administrative Procedure Act (APA). The rulemaking process was criticized for lacking transparency and preventing industry participants from operating under clearly communicated rules.

CEO Kristin Smith of the Blockchain Association expressed concerns about the SEC's actions, stating, "This is the latest example of the SEC’s blatant attempts to unlawfully regulate outside its authority." Smith emphasized the potential negative impact of the Dealer Rule on American companies and innovators in the digital asset ecosystem.

The lawsuit seeks declaratory and injunctive relief against the SEC to overturn the rule expansion and prevent its detrimental effects on the industry. Both the Blockchain Association and the Crypto Freedom Alliance of Texas are committed to defending the American digital asset ecosystem and advocating for policies that foster innovation while protecting consumers.

The Blockchain Association represents leading investors, companies, and projects in the cryptocurrency industry, advocating for a pro-innovation national policy and regulatory framework. On the other hand, the Crypto Freedom Alliance of Texas is a nonprofit trade association advocating for responsible digital asset policies in Texas to promote economic growth and innovation.

As the legal battle unfolds, both organizations are determined to challenge the SEC's regulatory overreach and ensure a fair and transparent regulatory environment for the digital asset industry.