DeFi Education Fund and Texas-based apparel company Beba LLC have dropped their 2024 lawsuit against the U.S. Securities and Exchange Commission (SEC)
The lawsuit was dropped without prejudice; the plaintiffs keep the option to refile later if circumstances change.
Why the lawsuit started
The lawsuit started in March 2024 after Beba conducted a free airdrop of its $BEBA token. Together with the DeFi Education Fund, Beba filed a pre-enforcement challenge claiming the SEC was regulating digital asset distributions, including airdrops, through enforcement actions rather than through formal rulemaking, arguing the approach violated the Administrative Procedure Act by skipping required public notice-and-comment procedures.
The SEC shift behind the withdrawal
The decision to drop the case follows noticeable improvements in the SEC’s approach to crypto regulations.
The dismissal document highlights the ongoing efforts of the SEC’s Crypto Task Force under Commissioner Hester Peirce, several of her 2025 speeches in which she suggested that airdropped tokens are typically not securities, and her indications that the Commission is considering an exemption framework specifically for airdrops.
In a post on X, the DeFi Education Fund explained that the progress made by the Crypto Task Force, combined with recent statements showing a shift in the Commission’s position on free airdrops, made the ongoing lawsuit unnecessary for now.
The group expressed confidence that the task force will soon address airdrops directly, which was the core issue the lawsuit targeted.
This development fits into a larger change in U.S. crypto regulation since former SEC Chair Gary Gensler left office. During his time, the agency drew heavy criticism for relying on enforcement cases rather than clear rules to shape policy.
Since his departure, the SEC has closed several lawsuits. A recent example is the agency’s decision to drop its two-year lawsuit against Nader Al-Naji, the founder of the BitClout platform now known as DeSo.
