DeFi Lobbying Group Withdraws Lawsuit Against SEC Over Airdrop Regulation, Citing Changed Crypto Market Environment

Recently, Beba, a Texas-based apparel company, and the crypto lobbying organization DeFi Education Fund (DEF) have voluntarily withdrawn their legal lawsuit against the U.S. SEC.

The lawsuit was jointly initiated by Beba and DEF in March 2024, alleging that the SEC unilaterally brought their free token airdrops under regulatory enforcement without going through formal rulemaking procedures, a move suspected of violating the Administrative Procedure Act.

According to documents filed with the Texas District Court, the SEC crypto task force's recent shift in stance toward cryptocurrency was the direct trigger for the withdrawal.

Additionally, SEC Commissioner Hester Peirce has repeatedly hinted that airdropped tokens should not be classified as securities and stated that the SEC is considering establishing an exemption framework for airdrops;

Combined with the White House issuing an executive order in January this year encouraging regulators to establish "safe harbors" for specific airdrops, this series of factors constitutes the key basis for the withdrawal.

DEF posted on the X platform, stating that given the SEC crypto task force's active work and signs of a shift in its stance toward free airdrops, continuing the litigation is no longer necessary.

However, their lawyers also made clear in court filings that if the expected SEC guidance fails to materialize or is insufficient, the plaintiffs reserve the right to refile their claims.

The withdrawal stems from a shift in regulatory direction. Former Chair Gensler's "enforcement as regulation" approach during his tenure was heavily criticized, but following his departure on January 20 last year, the SEC's regulatory stance shifted, successively rescinding multiple long-standing enforcement actions against crypto companies.

Moreover, the SEC recently ended a two-year lawsuit against BitClout founder Nader Al-Naji, which had alleged he illegally raised over $257 million and used more than $7 million for personal consumption.

In summary, this series of actions indicates that the SEC is reassessing its cryptocurrency regulatory strategy, aiming to create a more favorable policy environment for industry development.

#SEC # Policy Direction