The DeFi Education Fund and Beba LLC have jointly initiated legal proceedings against the US SEC to clarify the status of airdrops as non-securities offerings. They argue that the SEC’s regulatory actions pose an existential threat to the crypto industry and are an overreach of its power. The lawsuit aims to halt further enforcement actions and obtain a court declaration that airdropped tokens are not securities.
Beba LLC’s concern over potential SEC scrutiny prompted them to take legal action to establish that their BEBA token airdrop does not constitute a security. They argue that airdropped tokens are free, lack a shared enterprise, and do not entail a reasonable expectation of profit based on the efforts of others. This legal move reflects broader industry apprehension regarding the SEC’s stance on digital assets.
The lawsuit also accuses the SEC, under Gary Gensler’s leadership, of violating the Administrative Procedure Act (APA) by adopting a policy that broadly categorizes digital assets as investment contracts. DeFi Education Fund’s Chief Legal Officer Amanda Tuminelli contends that the SEC’s enforcement activities lack detailed guidelines and exceed its authority, posing a significant threat to the industry’s future. This legal challenge shows the ongoing tension between regulators and the crypto community over the classification and regulation of digital assets.
