The SEC has requested a judge to dismiss a lawsuit filed by an American apparel company seeking to protect itself from potential regulatory action regarding a previous airdrop. Filed on July 3, the SEC aims to reject the March 25 lawsuit from Beba and the DeFi Education Fund (DEF). This lawsuit asked a Waco District Court judge to declare that Beba’s token, which it distributed, does not qualify as a security.
The SEC argues that the lawsuit is premature and based on a non-existent policy. Beba’s claim alleges that the SEC would classify their tokens as securities and potentially sue the company, citing remarks from Chair Gary Gensler in 2022. However, the SEC’s motion to dismiss asserts that there is no official policy as claimed by Beba and DEF, stating that no such rule, order, or action by the Commission supports their allegations.
The SEC has countered that the complaint lacks allegations of imminent or threatened regulatory action against Beba, or any investigation by the SEC into the company.
“In essence, plaintiffs are asking this Court to rule on the legality of a non-existent policy and to prevent potential future enforcement actions that may never materialize.”
The SEC has initiated lawsuits against numerous crypto firms for alleged violations of U.S. securities laws, asserting that many cryptocurrencies are unregistered securities.
Beba and DEF argued in their lawsuit that this constitutes a violation of the Administrative Procedure Act (APA) because the SEC bypassed the formal rulemaking process.
The SEC argued that an unwritten policy or the mere threat of enforcement does not meet the APA’s definition of a rule. The regulator emphasized its immunity from lawsuits unless it explicitly waives that immunity through actions such as formal rulemaking. According to the SEC, the alleged policy mentioned by Beba and DEF does not constitute sufficient evidence of the SEC having waived its immunity by forming a stance on cryptocurrencies.
“The SEC acts through a majority vote of its five Commissioners,” the regulator clarified. “A statement made by a single Commissioner does not signify the adoption or existence of a Commission policy, and a Commissioner’s speech does not constitute agency action.”
Cointelegraph reached out to Beba and the DeFi Education Fund for comment but had not received a response at the time of publication.
