The Securities and Exchange Commission (SEC) has moved to dismiss a lawsuit brought by an American apparel company attempting to preempt potential regulatory actions following a previous airdrop.
On July 3, the SEC filed a motion to dismiss a lawsuit filed on March 25 by Beba and the DeFi Education Fund (DEF) in the Waco District Court. The lawsuit sought a ruling from the court affirming that Beba’s self-named token distributed via airdrop did not qualify as a security.
The SEC, however, contends that the lawsuit is premature and based on a non-existent policy. According to the SEC, Beba’s claim anticipates that the SEC would classify BEBA tokens as securities and take legal action against the company, citing remarks made in 2022 by SEC Chair Gary Gensler that most digital assets are considered securities.
In its motion, the SEC argued that the lawsuit is premature because it relies on an alleged policy that the SEC has not adopted and does not exist in reality. The SEC further stated that Beba and DEF failed to identify any official Commission action reflecting the supposed policy.
The SEC emphasized that the complaint does not demonstrate that regulatory action against Beba is imminent or that the SEC has conducted an investigation into the company. The SEC has previously initiated legal actions against several cryptocurrency companies for allegedly violating U.S. securities laws, asserting that numerous cryptocurrencies are unregistered securities.
Beba and DEF alleged in their lawsuit that the SEC’s actions violated the Administrative Procedure Act (APA) by sidestepping the formal rulemaking process. However, the SEC countered that an informal policy or the threat of enforcement does not constitute a rule under the APA’s definition.
The SEC underscored its immunity from lawsuits unless it explicitly relinquishes that immunity through actions such as formal rulemaking. According to the SEC, the alleged policy cited by Beba and DEF does not suffice to demonstrate that the SEC waived its immunity by forming a definitive stance on cryptocurrencies.
“The SEC acts through a majority vote of its five Commissioners,” the SEC explained, clarifying that statements made by individual Commissioners do not signify the adoption or existence of an official Commission policy, as they do not constitute agency action.
Efforts to reach Beba and the DeFi Education Fund for comment by Cointelegraph were unsuccessful at the time of publication.
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