Texas court orders SEC to repeal controversial rule redefining term "dealer"

A Texas court has ordered the U.S. Securities and Exchange Commission (SEC) to repeal a controversial rule that broadly redefines the term "dealer," affecting both the crypto industry and traditional financial firms. The rule was approved in February by a 3-2 vote of SEC board members, with the court finding that the rule exceeded the SEC's statutory authority. Traditionally, a dealer is an entity that buys and sells securities for its own account, rather than trading for others. The SEC's expanded definition is intended to include any entity that has the effect of providing market liquidity, particularly in the U.S. Treasury market. Crypto industry participants initially objected to the rule because a footnote in the original proposal explicitly stated that entities "involved in transactions in crypto securities" would need to comply with securities laws, register with the SEC and join an industry-backed self-regulatory organization. In other words, the expanded interpretation effectively eliminates the traditional distinction between "trader" and "dealer." (The Block)