The SEC voluntarily withdrew its appeal against the DeFi rulemaking proposal

ChainCatcher News, the U.S. SEC voluntarily withdrew its appeal on Wednesday regarding a ruling that prevented the agency from expanding the scope of existing securities laws to cover DeFi users and projects.

In a four-page motion submitted to the U.S. Fifth Circuit Court of Appeals, the SEC expressed its desire to "voluntarily withdraw this appeal," a move that faced no opposition.

In November of last year, a federal judge in Texas ruled that the SEC's expansion of the legal definition of "dealer" exceeded the agency's authority. The judge found that the modification of the SEC's dealer rules was unlawful because it conflated DeFi traders with financial brokers.

Kristin Smith, CEO of the Blockchain Association, stated in a release that the SEC's voluntary withdrawal of the appeal is a significant victory for the digital asset industry, "We initially sued the SEC to challenge the agency's illegal overreach, which attempted to unilaterally redefine the boundaries of its statutory authority. With the new leadership of the agency leading to today's final dismissal, we look forward to productive dialogue between the industry and the SEC."