Experts say the new broker-dealer rules from the U.S. SEC regarding LPs will be challenged in court

ChainCatcher news, according to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) passed new rules yesterday redefining "dealers" and "government securities dealers." SEC Commissioner Hester Pierce noted that she could not support the final rules because the definition of dealers "does not align with the legal framework in which it operates, will distort market behavior, reduce market quality, and turn dealers (many of whom are customers) into dealers."

Many DeFi supporters and cryptocurrency experts shared their concerns about the new rules on social media. Delphi Labs' General Counsel Gabriel Shapiro recounted Pierce's interactions with SEC staff regarding dealer registration requirements, explaining how the new rules would affect liquidity providers. Consensys Senior Counsel and Global Head of Regulatory Affairs Bill Hughes stated that the new rules make it increasingly important to clearly define which crypto assets fall under U.S. law as securities.

He added that the new rules regarding cryptocurrencies will be challenged in federal court, as these rules have a significant impact on the securities market. "You can anticipate that many sectors will seek judicial review. And the SEC's recent track record in such cases has been poor. Shockingly, the SEC seems completely uninterested in providing this clarity. The public's only hope in the short term remains that Congress will take action."