The Blockchain Association and the Crypto Freedom Alliance of Texas sued the U.S. Securities and Exchange Commission over a newly adopted dealer rule that they say would have "disastrous effects" on the industry.

Both groups filed a complaint against the regulator on Monday in a Texas district court, accusing the SEC of violating the Administrative Procedures Act — a law that governs how federal agencies develop and issue rules. The Blockchain Association is backed by members such as Coinbase, Digital Currency Group, Uniswap and Kraken, among others. 

The groups are asking for a court order to "strike down" the new rule.

"Before more harm can be done by this rabid regulator, we are seeking declaratory judgment and injunctive relief against the SEC to overturn their rule expansion …