A Texas court has ordered the Securities Exchange Commission (SEC) to repeal a controversial rule that broadly redefines the term "dealer," affecting the crypto industry and traditional financial firms. The rule, approved by a 3-2 vote of SEC committee members in February, was found by the court to exceed the SEC's legal authority. Traditionally, a dealer is an entity that buys and sells securities for its own account, rather than for someone else. The SEC's expanded definition is intended to include any entity that has the effect of providing market liquidity, particularly in the Treasury market. Crypto industry participants initially objected to the rule because a footnote in the original proposal made it clear that entities "dealing in crypto securities" would need to comply with securities laws, register with the SEC and join industry-backed self-regulatory organizations. In other words, the expanded interpretation effectively removes the traditional distinction between "trader" and "dealer."