Key Notes

Key Notes:

The decision by the SEC comes following a lawsuit by the Blockchain Association and Crypto Freedom Alliance of Texas.Blockchain Association CEO Kristin Smith hailed the SEC’s dismissal as a significant win for the digital assets industry.With total value locked (TVL) in DeFi increasing across Ethereum, Solana, and Layer 2 networks like Arbitrum, experts are predicting a “DeFi festival” this year.

On Wednesday, the US Securities and Exchange Commission (SEC) decided to withdraw its rulemaking appeal which sought to expand the application of existing securities laws to decentralized finance (DeFi) users and projects.

The initial ruling had blocked the SEC’s attempt to bring DeFi under the scope of securities regulations, marking a significant moment for the industry. Thus, the withdrawal of the appeal suggests the SEC may no longer pursue efforts to subject DeFi platforms to traditional securities laws.

In the four-page motion submitted to the US Court of Appeals for the Fifth Circuit, the SEC stated its intent to “voluntarily dismiss this appeal”, without facing any opposition. This development could pave further regulatory clarity for the DeFi industry.

Blockchain Association CEO Kristin Smith said in a statement that the US SEC voluntarily dismissing its appeal is a major victory for the digital assets industry. She said:

“We first brought our lawsuit against the SEC to challenge the agency’s unlawful power grab, which sought to unilaterally redefine the boundaries of its statutory authority. With new leadership at the agency leading to today’s final dismissal, we’re looking forward to productive conversations between industry and the SEC moving forward.”

The SEC’s appeal was tied to a lawsuit filed by the Blockchain Association and the Crypto Freedom Alliance of Texas. The suit contended that the SEC’s attempt to extend its modified rules to DeFi projects violated the Administrative Procedure Act (APA).

Although this recent development is a big win for the DeFi industry the overall DeFi space is seeing mixed reactions at the moment. However, the industry has been catching up fast for a bullish DeFi summer ahead. Furthermore, the growing liquidity across DeFi protocol further revives investor confidence, particularly for decentralized exchanges (DEXs).

Also, since the beginning of February, the total value locked (TVL) in the decentralized finance space has been on the uptick since the beginning of February. The growth in Total Value Locked (TVL) aligns with heightened activity across chains like Ethereum, Solana, and BNB Chain, alongside the rising adoption of Layer 2 scaling solutions such as Arbitrum and Optimism.

Furthermore, crypto industry experts have turned optimistic for a DeFi festival ahead this year in September. Speaking at Consensus 2025 in Hong Kong, Charles d’Haussy suggested that the term “DeFi summer” falls short of capturing the anticipated surge in decentralized finance activity. Instead, he proposed “DeFi festival” as a more fitting descriptor, emphasizing its potential for sustained and continuous growth.

“DeFi summer, in people’s minds, is like three months of crazy parties. I think this short period is behind us. I think it will be a very long party for months and months,” he said.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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