• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M

SEC Decision: A Victory for DeFi and Cryptocurrencies

user avatar

by Giorgi Kostiuk

4 months ago


The SEC unexpectedly withdrew its appeal to expand securities laws to DeFi, marking a significant victory for the crypto industry. Let's explore why this happened and what it means for DeFi, crypto firms, and investors.

What Just Happened?

The SEC had proposed an expanded definition of “dealer” that would have required DeFi protocols, market makers, and liquidity providers to register as securities exchanges and brokers. However, in November 2024, a federal court in Texas struck down the SEC’s expanded rule, calling it “untethered” from existing laws. The lawsuit was brought by the Blockchain Association and the Crypto Freedom Alliance of Texas. In February 2025, the SEC quietly withdrew its appeal by filing a motion to dismiss in the U.S. Fifth Circuit Court of Appeals. No opposition was raised, effectively sealing the decision.

Why Did the SEC Back Down?

First, the Texas court’s ruling was strongly against the SEC, stating that it exceeded its authority by attempting to regulate DeFi protocols like traditional financial brokers. Continuing the appeal risked another legal defeat. Secondly, with new leadership following Gary Gensler’s departure, the SEC is under acting Chair Mark Uyeda, and crypto-friendly Commissioner Hester Peirce is leading a new Crypto Task Force, signaling a more collaborative approach rather than aggressive enforcement. Thirdly, the previous approach under Gensler was criticized as an attempt to regulate by enforcement rather than establishing clear guidelines. Finally, industry and political pressure had mounted against the rule. Crypto advocacy groups, including the Blockchain Association, pushed back, as discussions around regulatory clarity grew.

What This Means for Crypto and DeFi

Firstly, this decision ensures that DeFi protocols, liquidity providers, and automated market makers won’t be forced to register as securities dealers—at least for now. Secondly, while this dismissal is a win, it doesn’t mean the SEC is stepping away from crypto regulation entirely. Future rules could still impact the industry, but the approach may be more measured. Thirdly, with regulatory clarity improving, more institutional investors may enter the DeFi space, reducing fears of sudden regulatory crackdowns. Finally, instead of lawsuits and enforcement actions, the SEC may engage with the industry to create clearer, fairer rules for DeFi and crypto, leading to a more stable environment for innovation.

The SEC's withdrawal from the appeal indicates potential shifts in how the crypto sphere is regulated. This is a substantial victory for DeFi and possibly a positive signal for institutional growth.

0

Rewards

chest
chest
chest
chest

More rewards

Discover enhanced rewards on our social media.

Other news

Toncoin: UAE Denies 'Golden Visa' Claims for Investors

chest

UAE officials denied claims of a 'golden visa' for Toncoin investors, leading to a decline in its price.

user avatarGiorgi Kostiuk

Hong Kong Integrates Digital Assets into ETP Market

chest

Hong Kong has introduced over 210 ETPs, including digital assets, enhancing market liquidity and global interest.

user avatarGiorgi Kostiuk

IMF Denies Power Subsidies, Impacting Pakistan's Cryptocurrency Mining Plans

chest

IMF rejects power subsidy plan for crypto mining in Pakistan, jeopardizing investments in the sector.

user avatarGiorgi Kostiuk

Community Vote on WLFI Token Trading Starts July 2025

chest

The community will decide on the tradability of the WLFI token backed by the Trump family. A successful vote may improve liquidity and market position.

user avatarGiorgi Kostiuk

Olaxbt Secures $3.38 Million Seed Funding to Enhance AI Trading Capabilities

chest

Olaxbt has raised $3.38 million from Amber Group and other investors to improve AI technologies in crypto trading.

user avatarGiorgi Kostiuk

Daily Memecoin Trading Volume on LetsBonk.fun Reaches $95.36 Million

chest

LetsBonk.fun breaks the record for memecoin trading volume, reaching $95.36 million. This article explores the reasons behind this surge.

user avatarGiorgi Kostiuk
dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.