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The court in Texas, USA orders the SEC to abolish the controversial rule of redefining the term "trader"

The court in Texas, USA orders the SEC to abolish the controversial rule of redefining the term "trader"

Bitget2024/11/22 02:02

On November 22, a court in Texas, USA ordered the U.S. Securities and Exchange Commission (SEC) to abolish a controversial rule that broadly redefined the term "dealer", affecting both the cryptocurrency industry and traditional financial companies.

The rule was passed by a vote of 3 to 2 among SEC members in February, but the court ruled it exceeded the SEC's statutory authority. Traditionally, dealers are entities that buy and sell securities for their own accounts rather than trading on behalf of others. The expanded definition by SEC aimed to include any entity with an effect of providing market liquidity, especially in the US Treasury market.

Participants from crypto industry initially objected to this rule because footnotes in original proposal explicitly stated that entities involved in "crypto-securities transactions" would need to comply with securities laws, register with SEC and join self-regulatory organizations supported by industry. In other words, this expanded interpretation effectively eliminated traditional distinction between "traders" and "dealers".

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