The DeFi Education Fund, a prominent crypto lobbying group, and Beba, a Texas-based apparel company, have voluntarily dismissed their 2024 lawsuit against the U.S. Securities and Exchange Commission (SEC). The dismissal, filed on Friday in the U.S. District Court for the Western District of Texas, was made without prejudice, preserving the plaintiffs' right to refile the case if necessary.
The lawsuit was originally filed as a pre-enforcement challenge, arguing that the SEC had shaped its digital asset enforcement policy, particularly regarding token airdrops, without going through the formal notice-and-comment rulemaking process required by the Administrative Procedure Act. The plaintiffs sought judicial clarity on whether freely airdropped tokens constitute securities.
The groups cited a significant shift in the SEC's regulatory posture as the reason for dropping the case. They pointed to recent work by the SEC Crypto Task Force and public statements from officials, including Commissioner Hester Peirce, suggesting that free airdrops may not fall under securities laws. The court filing specifically referenced Peirce's remarks in May about a potential exemption framework for airdrops and a January White House executive action encouraging a "safe harbor" for certain airdrops.
"Given the good work done by the SEC Crypto Task Force and recent speeches that suggest a change in the Commission’s position regarding free airdrops, we decided continuing was unnecessary for the time being and we can re-file if we need to later on," the DeFi Education Fund stated in a post on X. The group added that it expects the Task Force to address the airdrop issue soon.
This development occurs against the backdrop of a leadership change at the SEC. Under former Chair Gary Gensler, the agency was criticized for an "enforcement-first" approach, pursuing numerous cases against crypto exchanges and DeFi protocols. Gensler resigned in January 2025. Since then, the SEC under new, more pro-crypto leadership has moved to dismiss or settle several outstanding enforcement cases, including a two-year lawsuit against BitClout founder Nader Al-Naji, and has prioritized collaborative dialogue and legislation over pure enforcement.
