A Texas federal judge has ruled that the US Securities and Exchange Commission’s (SEC) interpretation of the dealer rule, which aimed to regulate decentralized finance (DeFi) users and projects, is unlawful. The judge agreed with the Blockchain Association, a cryptocurrency lobbying group, that sued the SEC in April over the expansion of the legal definition of the term ‘dealer’ to include DeFi protocols and transactions.
Judge Reed O’Connor granted summary judgment to the Blockchain Association, meaning the SEC must vacate and set aside the crypto-related modifications it made to its dealer rule earlier this year. The SEC’s interpretation would have required DeFi projects and users to register as securities exchanges and brokers, similar to stock exchanges and Wall Street traders.
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