The U.S. Securities and Exchange Commission (SEC) has voluntarily dismissed its appeal in a lawsuit over its controversial “dealer rule.” The SEC’s decision came after the Blockchain Association challenged the rule, arguing that it represented arbitrary and capricious rulemaking that could harm the emerging crypto sector.
The SEC’s filing, which was made public today, states that it is withdrawing the appeal under Federal Rule of Appellate Procedure 42(b). Both sides have agreed that each party will bear its own costs, with the plaintiffs — including the Blockchain Association — not opposing the motion. The SEC had initially appealed a district court ruling from November 2024, which had favored the plaintiffs and criticized the agency’s rulemaking as overreaching.
The rule in question had raised concerns across the crypto industry, as it potentially threatened to stifle innovation and disrupt the growth of digital assets by imposing unnecessary regulations on digital asset dealers. The Blockchain Association had argued that the SEC’s actions were harmful to the industry, claiming the agency’s stance amounted to unjustified regulatory overreach.
Today’s motion to dismiss, filed by the SEC, marks the conclusion of a lengthy legal battle and a policy shift within the agency. The decision is seen as a win not only for the Blockchain Association but also for innovators, entrepreneurs, and developers working in the blockchain and cryptocurrency sectors.
Following the announcement, the Blockchain Association hailed the dismissal as a “complete victory.” In a statement, the association said, “Today marks a complete victory for us – and the broader industry – in our lawsuit against the SEC over the dealer rule. We first challenged the SEC’s dealer rule in April of last year, arguing that the SEC’s misguided attacks against the industry amounted to arbitrary and capricious rulemaking.”
The association celebrated the ruling as a triumph for the digital asset industry, stressing the importance of preserving innovation and fostering a regulatory environment that supports the growth of new technologies.
