New York, Tuesday, October 29, 2024-The Blockchain Association and the Crypto Council for Innovation, two major crypto lobbying groups, yesterday (28) filed a brief supporting apparel company Beba’s lawsuit against the US Securities and Exchange Commission (SEC).
The SEC has moved to dismiss Beba’s suit, but the crypto groups are asking the court to deny that request and support a ruling in favor of the plaintiffs.
The groups argue that token airdrops, such as Beba’s shopper rewards, should not be classified as securities, pressing for clearer regulatory guidance from the agency.
The brief, filed in the Waco District Court, urges the court to compel the SEC to provide clarity on whether token airdrops violate securities law.
In March, Beba and the DeFi Education Fund preemptively sued the SEC, claiming that airdrops don’t meet the criteria of the Howey Test, which determines if a transaction is an “investment contract.”
The crypto organizations argue that without an investment of money, airdrops shouldn’t be regulated as securities.
The Blockchain Association also noted that the lack of regulatory clarity is prompting talent and innovation to leave the US, which the association claims is partly due to the SEC’s “regulation by enforcement.”
The suit is one of many recent legal actions challenging the SEC’s approach to crypto regulation.
Crypto companies, including Beba, argue that the agency’s stance overreaches its authority and violates the Administrative Procedures Act, intended to ensure that federal agencies follow transparent rulemaking processes.
