Blockchain Association Urges SEC to Regulate Intermediaries, Not Code, in Push for Crypto Clarity

The Blockchain Association has formally pressed the U.S. Securities and Exchange Commission (SEC) to adopt a regulatory approach that targets intermediaries rather than neutral blockchain infrastructure. In a position statement shared via its official Twitter account, the advocacy group argued that securities laws should apply to entities acting as financial middlemen—not to the developers who write code or the decentralized networks they build.

Core Arguments Presented to the SEC

Central to the Blockchain Association's submission is the assertion that code constitutes a form of speech and that software developers should not be classified as financial intermediaries under securities regulations. The organization contends that drawing a clear distinction between intermediaries and neutral infrastructure is essential to fostering innovation within the digital asset sector. The argument aligns with broader First Amendment protections that have been applied to software in other legal contexts, where courts have recognized code as a form of expressive activity.

The advocacy group communicated this stance directly to the SEC at a time when the agency is evaluating potential updates to its regulatory framework. By urging the SEC to focus enforcement efforts on entities that facilitate transactions rather than on the underlying technology itself, the Association echoed a long-standing call from the broader crypto community for more precise definitions and tailored rules. The SEC currently applies the Howey Test—a framework derived from the 1946 Supreme Court case SEC v. W.J. Howey Co.—to determine whether a digital asset transaction qualifies as an investment contract, a standard that industry participants have argued is ill-suited to the structure of decentralized networks.

Context and Stakes

The Blockchain Association is a Washington-based advocacy organization representing the interests of the blockchain and cryptocurrency industry. The SEC, under Chair Gary Gensler, has brought enforcement actions against major cryptocurrency platforms including Coinbase and Binance, which critics cite as evidence of an approach that penalizes firms seeking compliance rather than providing clear guidance upfront. Detractors argue that this ambiguity has stifled innovation and driven projects to jurisdictions with more defined regulatory frameworks.

The current engagement between the Association and the SEC underscores growing demand within the crypto sector for a regulatory environment that balances meaningful oversight with the space needed for technological advancement. Stakeholders have pointed to the ongoing dialogue as particularly relevant given the current state of the digital asset market, where participants are seeking greater regulatory certainty following a period of heightened enforcement activity and judicial rulings that have produced mixed signals on how existing securities laws apply to digital assets.

What Comes Next

Industry participants and observers are now focused on how the SEC will respond to the Blockchain Association's arguments. A key question is whether the agency will adopt clearer distinctions between developers and intermediaries in any forthcoming guidance or rulemaking, particularly as ongoing legal proceedings—including the SEC's case against Ripple Labs—continue to shape judicial interpretation of how securities laws apply to digital assets.

Continued advocacy from the Blockchain Association could contribute to more concrete regulatory frameworks that reshape compliance and operational strategies for cryptocurrency projects. The SEC's next steps on this matter may set significant precedents for how digital assets are treated under U.S. securities law and how the roles of developers and intermediaries are defined going forward.

Source: CryptoNews

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