In simpler terms, the Blockchain Association is a business group located in Washington, D.C., focusing on cryptocurrency and blockchain industry representatives such as tech entrepreneurs, investors, and developers. Their goal is to influence policy and regulations that encourage innovation and the long-term success of the crypto and blockchain field. They achieve this through lobbying for supportive laws, offering educational materials to lawmakers, and increasing public and government awareness about blockchain technology.
On April 23rd, Kristin Smith, the CEO of Blockchain Association, explained in an interview with Sonali Basak and Tim Stenovec on Bloomberg Crypto why they had filed a lawsuit against the U.S. SEC.
Background of the Lawsuit
In the Northern District Court of Texas that very day, the Crypto Freedom Alliance of Texas and Blockchain Association submitted a complaint against the SEC’s new dealer rule. They contend that this rule extensively alters the definition of who can be classified as a dealer. According to their argument, this change poses significant challenges for the cryptocurrency sector, specifically decentralized finance (DeFi), where transactions are facilitated by software codes instead of intermediaries. The associations fear that this broadened definition could inappropriately include individual traders.
Issues with the SEC’s Dealer Rule
Smith argues that the SEC’s criticism of the crypto industry is overly broad and ignores the concerns raised by the sector. According to the association, the SEC’s actions go against the Administrative Procedure Act (APA), as the rule was implemented in an unreasonable way without considering industry feedback during the comment period. The lack of clear guidelines and failure to address crypto industry concerns during this phase is a significant aspect of their ongoing legal dispute.
Potential Consequences of the SEC’s Rule
Smith painted a bleak image of how the SEC’s rule could affect the cryptocurrency sector. She pointed out that the rule’s ambiguity has caused companies under the Blockchain Association umbrella to pause their hiring processes and postpone the introduction of fresh American products. In her opinion, this climate thwarts creativity and imposes substantial compliance hurdles for market actors. Several of these players, she asserts, might struggle to comply with the rule’s stringent demands.
The Broader Impact on Innovation
The Blockchain Association and the Managed Funds Association, representing hedge funds, have filed lawsuits in the hopes of delaying the SEC’s implementation of this new rule. Their goal is to persuade the SEC to reevaluate how the rule affects cryptocurrency technologies and trading, which are distinct from traditional financial instruments.
Final Remarks
During the interview, Smith repeatedly stressed the importance of clear regulations that allow cryptotech advancements to thrive. She voiced optimism that the ongoing legal action might pave the way for a regulatory landscape that fosters invention and expansion in the crypto sector.
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2024-04-24 21:51