Federal Court Rules Against SEC's Crypto Dealer Rule in Landmark Decision

The court found the SEC exceeded its authority with a rule targeting DeFi, marking a major victory for the crypto industry as SEC Chair Gary Gensler announces resignation.

• A federal judge in Texas struck down the SEC's expanded definition of 'dealer,' ruling it unlawfully targeted decentralized finance (DeFi) projects and users.
• The court determined the SEC overstepped its statutory authority under the Exchange Act by conflating traders and dealers, a distinction upheld for nearly a century.
• The lawsuit was brought by the Blockchain Association and the Crypto Freedom Alliance of Texas, who argued the rule imposed unfair and vague requirements on DeFi participants.
• The decision is seen as a significant blow to the SEC's regulatory approach to crypto under Chair Gary Gensler, who announced his resignation effective January 20, 2025.
• Donald Trump, following his re-election, has pledged to appoint an SEC chair supportive of the crypto industry, signaling potential shifts in regulatory priorities.

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