US SEC Voluntarily Withdraws DeFi Regulation Appeal

The U.S. Securities and Exchange Commission (SEC) has voluntarily withdrawn its appeal in a cryptocurrency-related case.

According to Decrypt on the 20th (local time), the SEC voluntarily withdrew its appeal related to attempting to apply existing securities laws to decentralized finance (DeFi) traders. Through a four-page document submitted to the U.S. Fifth Circuit Court of Appeals, the SEC stated that it “voluntarily withdraws this appeal” and will not raise any further objections.

This withdrawal stems from a lawsuit filed by the Blockchain Association and the Texas Cryptocurrency Freedom Coalition. They argued that the SEC’s requirement for DeFi protocols and traders to register as dealers or government securities dealers violated the Administrative Procedure Act (APA). In November last year, a Texas court ruled that the SEC’s expansion of the dealer definition exceeded its legal authority and was illegal, which the SEC had appealed.

Meanwhile, regarding this appeal withdrawal, Kristin Smith, CEO of the Blockchain Association, stated, “This decision has prevented the SEC’s attempt to abuse its authority,” and added, “We look forward to constructive dialogue between the industry and the SEC under new leadership.”