On February 19, the SEC filed a motion to withdraw its appeal against a ruling that limited the application of securities laws to cryptocurrency users and DeFi services.

1/ Today marks a complete victory for us – and the broader industry – in our lawsuit against the SEC over the dealer rule.

The SEC voluntarily dismissed its appeal of the lawsuit over the dealer rule brought by us and @CryptoFreedomTX.https://t.co/ajuJdrLOI4 pic.twitter.com/pbHClVefud
— Blockchain Association (@BlockchainAssn) February 19, 2025

In February 2024, the Commission expanded the definition of a “dealer,” bringing more financial transactions, including those involving cryptocurrencies, under its jurisdiction. The new provisions required market participants managing or holding over $50 million in crypto assets to register with the agency. The rules were set to take effect in April 2025, but SEC commissioners Mark Uyeda and Hester Peirce opposed their implementation.

The Blockchain Association and the Crypto Freedom Alliance of Texas sued the SEC, seeking to overturn the decision. The plaintiffs argued that the Commission had violated the Administrative Procedure Act by unlawfully broadening the definition of “dealer.” They described the agency’s initiative as “catastrophic” for the industry.

In November, a Texas District Court ruled that the SEC had exceeded its authority by applying “dealer rules” to cryptocurrencies. The Commission appealed in January but has now withdrawn its appeal.

“Today, we secured a complete and final victory against the SEC’s dealer rules. With the Commission voluntarily dropping its appeal, the crypto industry can breathe a sigh of relief. Our industry has a bright future—let’s keep building,” said Blockchain Association CEO Kristin Smith.

On January 20, SEC Chairman Gary Gensler resigned amid accusations from the crypto community of waging a “war” against the industry.

Mark Uyeda was appointed interim chairman, while Hester Peirce now leads a task force on crypto regulation. One of the group’s priorities is defining which digital assets should be classified as securities.

Reminder: Former President Donald Trump has nominated Paul Atkins—a former SEC commissioner and crypto advocate—as the agency’s next chairman.