The Securities and Exchange Commission (SEC) has moved to dismiss a lawsuit filed by an American apparel company seeking to shield itself from potential regulatory action related to a previous airdrop.
On July 3, the SEC filed a motion to dismiss the lawsuit brought on March 25 by Beba and the DeFi Education Fund (DEF) in the Waco District Court. The lawsuit requested a court determination that Beba’s self-named token, distributed through an airdrop, does not qualify as a security.
The SEC contends that the lawsuit is premature and based on a hypothetical policy. According to Beba’s claims, the SEC allegedly considers BEBA tokens as securities and plans to prosecute the company, citing remarks made by Chair Gary Gensler in 2022. However, the SEC argues that there is no actual policy in place to support these assertions.
In its motion, the SEC stated that Beba and DEF failed to identify any official rule, order, or action by the Commission reflecting the supposed policy. Moreover, the SEC emphasized that the lawsuit did not demonstrate that regulatory action against Beba was imminent or had been investigated by the SEC.
The SEC has initiated legal actions against several cryptocurrency firms for allegedly violating U.S. securities laws, asserting that many cryptocurrencies are operating as unregistered securities.
Beba and DEF argued in their lawsuit that the SEC’s actions violate the Administrative Procedure Act (APA), claiming the regulator bypassed proper rulemaking procedures. However, the SEC countered that an unwritten policy or the threat of enforcement does not constitute a rule under the APA.
The SEC further explained that it maintains immunity from lawsuits unless it explicitly waives that immunity through actions such as formal rulemaking. The alleged policy cited by Beba and DEF, according to the SEC, does not suffice as proof of such waiver.
“The Commission acts through a majority vote of its five Commissioners,” the SEC clarified. “Statements made by individual Commissioners do not constitute the adoption of Commission policy, and speeches by Commissioners do not qualify as agency actions.”
Cointelegraph reached out to Beba and the DeFi Education Fund for comment but had not received a response at the time of publication.
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