A US federal court in Texas has vacated the Securities and Exchange Commission’s (SEC) controversial “dealer” rule in a massive win for the crypto industry. The ruling highlights the courts’ growing resistance to unchecked regulatory authority.
This comes as Gary Gensler announced that he will be stepping down on January 20, 2025. His resignation will coincide with President-elect Donald Trump’s administration’s takeover, which is expected to end the tenure that saw the commission clash with Wall Street and the crypto industry.
Court ruling halts SEC’s crypto crusade
According to reports, Judge Reed O’Connor ruled that the regulator exceeded its statutory authority. He stated that the rule “de facto removes the distinction between ‘trader’ and ‘dealer'”. It is a distinction upheld for nearly a century. Hedge fund groups, including the MFA and AIMA, welcomed the decision.
The crucial ruling follows the broader trend of courts challenging the agency’s overreach. A similar decision came in the apex court’s Chevron decision, too.
However, the crypto industry isn’t alone in opposing the agency’s past rulings. The Managed Funds Association also brought a similar case which ended with another ruling against the SEC on the same day.
Kristin Smith, CEO of the Blockchain Association, called the rule an “unlawful overreach” as it acted like an extension of the SEC’s anti-crypto drive. She thanked the association, the Crypto Freedom Alliance of Texas, and the District Court for ruling that the SEC exceeded its statutory authority.
She suggested that this ruling is a fitting turning point to ending the SEC’s harassment campaign of the crypto industry. Smith believes that this will begin a new era for the market.
Gary Gensler to step down in January
The SEC Chair, known for his aggressive regulatory approach toward the crypto industry, will step down on January 20. He was appointed by US President Biden in 2021 and led the reform aiming at transparency and reducing systemic risks.
Gensler’s tenure included battles with the crypto industry and several legal challenges to his ambitious rulemaking agenda. Meanwhile, his exit marks a turning point for the commission and the market with many wondering if the agency’s aggressive stance will shift under new leadership.
Bitcoin and the entire crypto market celebrated the much-anticipated announcement. In the days since his resignation announcement, the overall digital assets market cap has jumped by over 3% as BTC price rallied past $99,000.
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