A US District Judge has overturned the SEC's broker-dealer rule, which sought to redefine 'broker' to include liquidity providers and automated market makers with over $50 million in capital. Judge Reed O'Connor determined that the SEC overstepped its statutory authority with this broad definition, which would impose challenging regulatory requirements, particularly on decentralized networks lacking a central authority for KYC and AML enforcement. Marisa Tashman Coppel, legal head at the Blockchain Association, hailed the ruling as a significant victory for the crypto industry. Despite this win, the SEC may appeal the decision in the 5th Circuit Court of Appeals. The rule, enacted in February 2024, was criticized for its potential to stifle innovation and impose heavy regulatory burdens on crypto projects. Advocacy groups, including the Blockchain Association and Crypto Freedom Alliance of Texas, argued that the SEC's actions threatened the future of crypto innovation in the U.S.

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