The SEC violated the Administrative Procedures Act (ADA), which governs the development of rules by federal agencies, the plaintiffs claim.
In February, the Commission voted to adopt rules requiring market participants providing liquidity to comply with federal securities laws, including when it comes to cryptocurrencies. The new rules will apply to all users making transactions, except those who own assets worth less than $50 million.
Blockchain Association CEO Kristin Smith said that by passing the rule, the SEC exceeded its authority in defining dealers, ignoring stakeholder concerns about how the rule would apply to digital assets and decentralized finance (DeFi)?
“This crazy regulator will be able to cause even more harm to the crypto industry. We are seeking an injunction against the SEC to prevent the agency from expanding securities rules to cover crypto assets and using its powers against the industry. The SEC, for unknown reasons, refused to clearly explain how and when the rule would apply to the cryptocurrency market,” Smith explained the appearance of the lawsuit.
An SEC spokesman responded by saying that the agency is developing regulations in accordance with its authority and is prepared to defend the rules for dealers in court.
In February, Lejilex and CFAT also sued the American regulator, accusing them of abuse of power.
Source: Bits
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