Marisa
@mtcoppel
Today is the 1 week anniversary of @blockchainassn filing its first lawsuit against the SEC - challenging the dealer rule. It's unfortunate that it's come to this, but we're excited to defend our members and the industry alongside our co-plaintiff, the Crypto Freedom Alliance of Texas. https://t.co/JnWZcKVXzO
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Marisa
@mtcoppel
We raise several APA claims centering on the SEC’s unlawful redefining of the term “dealer.” By statute, the courts, and the SEC’s own interpretation, being a “dealer” previously turned on the specific services offered to customers. The SEC has flipped this on its head.
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Marisa
@mtcoppel
Now, the redefined term doesn’t factor in a customer relationship and focuses entirely on whether a person’s activity has the post hoc effect of providing liquidity. The rule violates the APA by exceeding the SEC’s statutory authority and failing to contain proper analysis.
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Marisa
@mtcoppel
The rule has a majorly detrimental impact on the digital asset ecosystem, particularly DeFi – pulling in liquidity providers and DeFi software and its developers, although it is vague and unclear. Requiring intermediation of DeFi protocols defeats the purpose of DeFi.
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Marisa
@mtcoppel
The new rule introduces two tests to identify dealers, both focus on the effect of trading activity rather than focusing on a customer relationship. Again, this is a drastic departure from any previous SEC interpretation of the term “dealer.”
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Marisa
@mtcoppel
The SEC goes further – even if a participant’s trading activity doesn’t meet either test to be a dealer, they still cannot presume to be free from liability for failure to register as a one. So there’s this third, undefined, test too…
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