U.S. District Court Judge Robert Wilkins has blocked a CFTC rule that sets position limits on derivatives tied to 28 commodities.

“The CFTC’s error in this case was that it fundamentally misunderstood and failed to recognize the ambiguities in the statute,” Wilkins wrote in his decision. The ruling hinged on whether the CFTC had made a case that its rule was necessary and appropriate.

The rule, a mainstay of Dodd-Frank financial reform, was meant to curb speculative trading in the wake of the 2008 financial crisis.

The International Swaps and Derivatives Association, the ISDA, issued a statement praising the ruling.

“The position limits rule would adversely impact commodities markets and market participants, including end-users, by reducing liquidity and increasing price volatility,” said Robert Pickel, ISDA Chief Executive Officer, and T. Timothy Ryan, Jr., SIFMA President and Chief Executive Officer.

Gary Gensler, the chairman of the CFTC, disagreed, calling the rule on position limits “critically important” to financial reform.

The CFTC will now have to go back to the drawing board to prove that position limits would curb speculation and prevent market volatility.