S&C Successfully Challenges SEC’s Expanded ‘Dealer’ Definition for Crypto Groups
In a recent court ruling, Sullivan & Cromwell LLP successfully obtained a summary judgment decision from the U.S. District Court for the Northern District of Texas. This decision resulted in the vacating of the Securities and Exchange Commission’s rules that expanded the definition of “dealers” required to register under the Securities Exchange Act. Representing two nonprofits in the digital assets industry, the Crypto Freedom Alliance of Texas and the Blockchain Association, the firm argued that the SEC’s broad dealer definition could impact traders and participants in decentralized finance protocols. The court agreed that the SEC had overstepped its authority by enacting such a broad definition.
The S&C team, which includes Judson Littleton, Jeff Wall, Elizabeth Rose, Oliver Engebretson-Schooley, Cooper Godfrey, and Gabriella Papper, secured this victory. This win comes after previous successes in challenging agency rulemaking, such as obtaining a decision to vacate the FTC’s noncompete rule and securing a stay of the FCC’s net neutrality rule. With other ongoing challenges against the FCC’s digital discrimination rule, the SEC’s securities lending and short reporting rules, and the CFPB’s open banking rule, S&C continues to represent industry and business groups in critical legal battles regarding regulatory issues.
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