The U.S. Supreme Court’s ruling on Friday to overturn the Chevron doctrine could be beneficial to crypto, sources say.
When asked about the Supreme Court decision’s impact on crypto, Majority Whip Tom Emmer said it would have a direct impact on SEC Chair Gary Gensler.
The U.S. Supreme Court’s decision to overturn the Chevron doctrine — a 40-year-old court decision that defers to federal agencies to interpret the law how they see fit — could prove to be beneficial to the crypto industry.
The Supreme Court justices voted 6-3 on Friday to overturn that doctrine. The opinion was led by Chief Justice John Roberts.
“Experience has also shown that Chevron is unworkable,” Roberts said in his opinion. “The defining feature of its framework is the identification of statutory ambiguity, which requires deference at the doctrine’s second step. But the concept of ambiguity has always evaded meaningful definition.”
The Chevron doctrine, also called the Chevron deference, comes from a Supreme Court case in 1984 called Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. In that case, the Supreme Court put forward a legal test that said courts should defer to a federal agency’s interpretation when the law is ambiguous.
Friday’s Supreme Court decision comes as federal agencies have been criticized, often by more conservative groups, for overreaching into areas they don’t have authority over. The opinion also comes as the U.S. Securities and Exchange Commission is battling it out with crypto firms in the courts.
Justice Elena Kagen pushed back on the opinion.
“Today, the Court flips the script: It is now ‘the courts (rather than the agency)’ that will wield power when Congress has left an area of interpretive discretion A rule of judicial humility gives way to a rule of judicial hubris,” Kagan said in her dissenting opinion.
Sen. Elizabeth Warren, D-Mass., called the Supreme Court ruling a “power grab,” in a post on X on Friday.
“Corporate interests want extremist judges to write the rules at the expense of consumers, workers, safety, and the environment,” Warren said.
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The crypto effect
The Supreme Court’s decision gives the crypto industry an advantage, said Amanda Tuminelli, chief legal officer at the DeFi Education Fund.
“This ruling means that executive agencies, like the SEC and CFTC, will need to be more cautious in extending their regulatory reach without clear statutory authorization, especially in novel and rapidly evolving fields like crypto and AI,” Tuminelli said.
The crypto industry can now be optimistic when it comes to cases going through the court system since courts “will now be able to freely determine the most appropriate interpretation of statutory law without giving undue deference to the SEC’s interpretation,” Tuminelli added.
Tuminelli also said she was hopeful the ruling would lead to action from Congress. Lawmakers in Washington are currently working on a few bills to regulate crypto, including FIT21, which looks to take a comprehensive approach to writing rules for the industry. However, bills like those have not made it to President Joe Biden’s desk.
“We are also hopeful that this ruling will lead to explicit congressional action to clarify existing statutory ambiguities, as well as a significant slowdown in regulatory enforcement actions against the industry,” Tuminelli said.
When asked about the Supreme Court decision’s impact on crypto, Majority Whip Tom Emmer said it would have a direct impact on SEC Chair Gary Gensler.
“The Supreme Court’s decision to overturn Chevron deference kneecaps the regulatory abuses of Gary Gensler and every other unchecked, unelected bureaucrat who legislates-by-rulemaking,” Emmer said in an emailed statement.