#137 - Blockchain Association sues the SEC to strike down Dealer Rule
May 21, 2024
auto_awesome
The podcast delves into the lawsuit by the Blockchain Association against the SEC's Dealer Rule. Topics include the trend of litigation in the crypto space, remedies for the industry, expanding the definition of 'dealer,' and the rationale behind suing the SEC. Guests from the Blockchain Association share insights on advocating for policy positions and strategic legal projects in the crypto industry.
Crypto industry adopts offensive litigation strategies to challenge SEC regulations and seek quicker resolutions.
SEC's expanded definition of dealers and regulatory uncertainty prompt some in the crypto industry to consider operating outside the US for clarity and cost avoidance.
Deep dives
Litigation as a Strategic Approach in the Crypto Space
In the podcast, it is discussed how the cryptocurrency industry has shifted towards offensive litigation strategies, challenging SEC regulations. Industry members are turning to courts for quicker resolutions due to perceived hostility from the executive and legislative branches. The trend towards pre-enforcement litigation has emerged as a response to government scrutiny, leading to more proactive industry actions.
The Impact of SEC's Regulatory Actions on the Crypto Industry
The podcast highlights the SEC's aggressive stance towards cryptocurrency regulation, particularly targeting entities like Coinbase. The discussion delves into the SEC's expanded definition of dealers and its implications on various crypto ecosystem participants, potentially involving developers and liquidity providers. Regulatory uncertainty and the threat of expensive litigation are causing some to consider operating outside the US.
The Ecosystem Theory and Its Application in Legal Cases
The ecosystem theory introduced by the SEC implies that tokens with surrounding ecosystems could be classified as investment contracts. The legal debate surrounding this theory, as seen in the Coinbase case, questions its applicability to various token projects and its potential impact on the industry. The discussion emphasizes the need for clarity and consistency in legal interpretations to foster innovation.
Advocacy Efforts and Legal Challenges in the Crypto Industry
The podcast sheds light on advocacy initiatives within the cryptocurrency sector, emphasizing the importance of engaging with policymakers and regulatory agencies. Organizations like the Blockchain Association and the DeFi Education Fund play vital roles in advocating for clearer regulations and industry-friendly policies. Legal challenges, such as the lawsuit against the SEC's dealer rule, underscore the ongoing efforts to protect innovation and establish regulatory certainty in the crypto space.
Recently, the Blockchain Association (BA) and the Crypto Freedom Alliance of Texas (CFAT) filed a lawsuit against the Securities and Exchange Commission seeking a court order to strike down the SEC’s Dealer Rule due to the SEC’s various Administrative Procedure Act (APA) violations including preventing industry participants from being able to operate under clearly communicated rules and a lack of a fair and transparent rulemaking process.
This conversation covers that lawsuit and much more.
Marisa Tashman Coppel (@mtcoppel) is Head of Legal at the Blockchain Association and Laura Sanders is Policy Counsel at the Blockchain Association. Both play a critical role in developing and advocating for policy positions on behalf of the crypto industry while managing long-term legal projects and strategic litigation.
[1:47] The trend of litigation in the crypto space. [7:16] Remedies available for the crypto industry. [13:46] Definition and interpretation of the statutory term "dealer." [19:42] The impact of expanding the definition of "dealer." [27:04] Why sue the SEC? [33:46] The "ecosystem" argument, examined & much more. Disclaimer: Jacob Robinson and his guests are not your lawyer. Nothing herein or mentioned on the Law of Code podcast should be construed as legal advice. The material published is intended for informational, educational, and entertainment purposes only. Please seek the advice of counsel, and do not apply any of the generalized material to your individual facts or circumstances without speaking to an attorney.
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode