The U.S. Securities and Exchange Commission (SEC) has decided to drop its appeal in a key crypto rulemaking case. This move, made on Wednesday, signals a shift in how the regulator approaches digital assets under the new administration.
In a legal filing with the U.S. Court of Appeals for the Fifth Circuit, the SEC stated that it wished to “voluntarily dismiss this appeal.” The decision was not opposed, marking a clear end to the case.
The case began when a Texas judge ruled against the SEC’s attempt to expand its definition of “dealer.” The agency wanted decentralized finance (DeFi) users and projects to follow stricter securities laws. However, the judge said this move went beyond the SEC’s authority.
The crypto industry welcomed the decision. Kristin Smith, CEO of the Blockchain Association, called it a “major win” and said the ruling prevents the SEC from overstepping its powers. She also expressed hope for better cooperation between the agency and the digital assets industry in the future.
The SEC’s previous leadership, under Gary Gensler, had pushed for stricter rules on DeFi. Commissioner Hester Peirce, a known crypto advocate, had criticized the move, warning that it could harm market growth.
Since Gensler’s departure, the SEC has shown signs of a more open approach to crypto regulation. Acting SEC Chair Mark Uyeda has formed a special task force, led by Peirce, to create clearer rules for the industry.
Meanwhile, the SEC’s enforcement cases against Binance and Coinbase remain uncertain. A Washington, D.C., judge recently paused the case against Binance for 60 days, and a New York court allowed Coinbase to appeal its legal battle with the SEC.
The SEC has not yet made a public statement on its decision to drop the appeal.
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