The U.S. District Court for the Northern District of Texas has ordered the Securities and Exchange Commission to throw out its so-called "dealer" rule, finalized in February.
Crypto industry groups had sued the agency, arguing its rule marked an inappropriate stretch into the sector.
The ruling emerged just as SEC Chair Gary Gensler was announcing his resignation and touted the agency's legal wins against the crypto industry.
A Texas federal court has rejected the U.S. Securities and Exchange Commission's recent rule expanding the definition of a securities dealer to include a wider swath of firms — including some in the cryptocurrency sector. This adds a significant legal loss to the crypto legacy of SEC Chair Gary Gensler on the same day he announced his January departure.
In response to a lawsuit from the industry lobbying group Blockchain Association and the Crypto Freedom Alliance of Texas, a judge in the U.S. District Court for the Northern District of Texas granted an early decision Thursday that slammed the SEC for overextending its legal reach. The court ordered that the rule be thrown out.
"The court concludes that the SEC exceeded its statutory authority by enacting such a broad definition of dealer untethered from the text, history, and structure of the Exchange Act," according to the ruling from Judge Reed O’Connor.
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Will companies now sue the SEC?
