DeFi Group Ends Airdrop Lawsuit Against SEC After Shift

TLDR

• Beba and the DeFi Education Fund voluntarily dismissed their 2024 lawsuit against the SEC over its approach to token airdrops.
• The plaintiffs filed the dismissal without prejudice and preserved their right to refile the case if needed.
• The groups cited recent statements from SEC officials suggesting that freely airdropped tokens may not qualify as securities.
• The court filing referenced work by the SEC Crypto Task Force and remarks about a possible exemption framework for airdrops.
• The DeFi Education Fund said it expects the SEC to address airdrops soon through updated guidance.

A Texas apparel company and a crypto advocacy group have ended their lawsuit against the US Securities and Exchange Commission. They withdrew the 2024 case after pointing to recent changes in the agency’s approach to digital assets. The groups said recent SEC actions and statements made further litigation unnecessary for now.

DeFi Groups Withdraw Airdrop Lawsuit

Texas-based apparel firm Beba and the DeFi Education Fund filed a voluntary dismissal in federal court on Friday. They asked the US District Court for the Western District of Texas to close the case without prejudice.

Beba launched a free token airdrop in March 2024 and then joined the DeFi Education Fund in a pre-enforcement challenge. They argued the SEC shaped digital asset policy through enforcement without formal notice-and-comment rulemaking.

The plaintiffs claimed the agency violated the Administrative Procedure Act. They sought judicial clarity on whether free airdropped tokens qualify as securities under federal law.

In Friday’s filing, their lawyers cited recent SEC Crypto Task Force work and public statements. They also referenced speeches by Commissioner Hester Peirce suggesting airdropped tokens do not constitute securities.

The filing pointed to Peirce’s remarks in May about a possible exemption framework for airdrops. It also cited a January White House executive action encouraging a “safe harbor for certain airdrops.”

The DeFi Education Fund explained its decision in a post on X. “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 the case was unnecessary for the time being, and we can re-file if we need to later on,” the group said.

The group added that it expects further clarity soon. “The DEF team expects that the SEC Crypto Task Force will address airdrops soon the foundational issue at hand in this lawsuit,” it wrote.

Case Dismissed Without Prejudice, for Now

The plaintiffs filed the dismissal without prejudice and preserved their right to return to court. Their lawyers stated that they will refile if expected guidance does not materialize or proves insufficient.

“Should the expected guidance fail to materialize or be insufficient, Plaintiffs preserve their right to refile their claims,” the court document stated. The filing therefore, keeps the legal option open while regulators review policy.

The case unfolded during a period of scrutiny over the SEC’s crypto enforcement strategy. Under former Chair Gary Gensler, the agency pursued multiple actions against digital asset firms.

Gensler resigned on Jan. 20, 2025, and leadership changes followed at the agency. Since then, the SEC has moved to dismiss several long-running enforcement cases.

In a recent example, the SEC dropped a two-year lawsuit against Nader Al-Naji. The agency had accused the BitClout founder of raising more than $257 million and spending over $7 million on personal items.

The dismissal marked another step in the SEC’s recent actions against crypto. The agency has not yet issued formal rulemaking on airdrops as of the latest court filing.

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