SEC Withdraws Appeal Against Ruling on DeFi Regulation

According to Odaily, the U.S. Securities and Exchange Commission (SEC) has voluntarily withdrawn its appeal against a ruling that prevented the agency from expanding existing securities laws to include decentralized finance (DeFi) users and projects. The SEC submitted a four-page motion to the U.S. Fifth Circuit Court of Appeals expressing its intention to withdraw the appeal, which faced no opposition. In November of last year, a federal judge in Texas ruled that the SEC's attempt to broaden the legal definition of 'dealers' exceeded its authority. The judge found that the changes to the SEC's dealer rules were unlawful as they conflated DeFi traders with financial brokers. Kristin Smith, CEO of the Blockchain Association, stated that the SEC's decision to withdraw the appeal marks a significant victory for the digital asset industry. She emphasized that the initial lawsuit against the SEC was filed to challenge the agency's unauthorized attempt to redefine its statutory powers. Smith expressed hope for productive dialogue between the industry and the SEC following the dismissal under the agency's new leadership.