TBC & ICAN FILE AMICUS BRIEF CHALLENGING SEC
DALLAS, TX — The Texas Blockchain Council (TBC) and Investor Choice Advocates Network (ICAN), represented by Gray Reed Partners Chris Davis and Joshua Smeltzer, today filed an amicus brief in the United States District Court for the Western District of Texas supporting the Plaintiffs' opposition to the SEC's motion to dismiss in BEBA LLC and DeFi Education Fund v. SEC (Case No. Case No. 6:24-cv-153-ADA-DTG, before U.S. District Judge Alan D. Albright and U.S. Magistrate Judge Derek T. Gilliland).
The brief argues that the SEC's current regulatory approach to digital assets, which relies almost exclusively on enforcement actions rather than clear rulemaking, is harmful to innovation, market participants and investors alike. This approach has created significant regulatory uncertainty while stifling necessary public debate about appropriate oversight of the emerging digital asset industry.
A key excerpt from the amicus brief states: “The SEC's failure to engage in rulemaking delineating the permissible boundaries of trading in digital assets subjects the cryptocurrency industry, its trading platforms, and investors to unnecessary uncertainty as to what constitutes permissible legal conduct.”
“The SEC's approach of regulating through enforcement actions rather than clear rulemaking threatens to stifle innovation in Texas and across the United States," TBC President Lee Bratcher says. "We need a regulatory framework that protects investors while allowing American entrepreneurs to compete in this rapidly evolving global industry.”
"This regulatory ambiguity particularly impacts smaller market participants and retail investors who lack the resources to navigate unclear regulatory expectations,” Nick Morgan, Founder and President of ICAN, added. “The SEC's approach contradicts its mission to both protect investors and foster capital formation."
Key arguments presented in the amicus brief include:
- The SEC's "regulation by enforcement" strategy prevents meaningful discourse between government and industry stakeholders
- The lack of clear regulatory guidance creates unnecessary uncertainty and risk for market participants
- The SEC's approach effectively transforms it into a merit-based regulator, contrary to Congressional intent
- Critical questions about the SEC's authority and the intersection with other regulatory frameworks remain unaddressed
"The digital asset industry needs clear rules of the road that begin with explicit Congressional authorization and are implemented through a transparent process that allows for stakeholder input,” Chris Davis, lead counsel for the amici and co-chair of Gray Reed’s Blockchain and Digital Assets practice group, stated. “The current approach of regulation through enforcement actions and settlements fails to provide the clarity this emerging industry requires and runs counter to the SEC’s mission of protecting investors while fostering capital formation."
For a copy of the amicus brief, click here.
About Texas Blockchain Council
The Texas Blockchain Council is a nonprofit industry association working to make the State of Texas the jurisdiction of choice for bitcoin, blockchain, and digital asset innovation. www.texasblockchaincoucil.org
About Investor Choice Advocates Network
Investor Choice Advocates Network (ICAN) is a nonprofit public interest litigation organization dedicated to breaking down barriers to entry to capital markets and pushing back against the overreach of the Securities and Exchange Commission (SEC), serving as a legal advocate and voice for investors and entrepreneurs whose efforts help fuel vibrant local and national economies driven by innovation and entrepreneurship. www.icanlaw.org
About Gray Reed
Gray Reed isn't just a full-service Texas law firm – we strive to be the ultimate partner for businesses. With a comprehensive range of litigation and transactional practice groups focused on understanding our clients’ businesses and industries, our 150 attorneys are equipped to support companies, and high-net-worth individuals and families, based in Texas or operating within its borders. In addition, our commitment to clients goes beyond providing legal services. Through our subsidiary, Gray Reed Advisory Services, we further support our clients with a team of consultants providing strategic business solutions to drive measurable improvements in profitability, efficiency, operations and compliance, along with expertise in crisis communications, public relations and government affairs. Discover what sets us apart at www.grayreed.com and www.grayreedadvisory.com.