DeFi Education Fund and Beba LLC Sue SEC over Airdrop Classifications

By: Eliza Bennet

The DeFi Education Fund and Beba LLC, a Texas-based apparel company, have jointly initiated a legal action against the US Securities and Exchange Commission (SEC). The entities are seeking legal clarification that airdrops are not securities offerings.

The court document filed on March 25 raises concern over the SEC's regulatory activities, seen as an exercise in authority overreach by the two parties involved. The aim is to prevent further SEC scrutiny into the crypto sector. Beba LLC is particularly worried about possible SEC intervention regarding its BEBA token airdrop.

The lawsuit claims that the airdropped BEBA tokens are free, there is no common enterprise between Beba and the token recipients, no reasonable expectation of profits is encouraged, and there isn't any contractual agreement existing. It also alleges that the SEC, under the leadership of Gary Gensler, violated the Administrative Procedure Act (APA). This violation relates to the adoption of a policy considering most digital assets as investment contracts and many digital asset transactions as securities transactions.

The DeFi Education Fund's Chief Legal Officer, Amanda Tuminelli, stated that detailed instructions for the sector are lacking from the SEC. This has complicated matters, as it leads to considerable backlash and also doesn't come within their legal purview.