The U.S. Supreme Court’s decision to overturn the Chevron Doctrine — a 40-year-old court ruling that leaves it up to federal agencies to interpret the law as they see fit — could be a boon for the cryptocurrency industry.
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 doesn’t work,” Roberts said in his opinion. “A defining feature of this framework is that it identifies legal ambiguities that require deference in the second step of the doctrine. But the concept of ambiguity has always eluded meaningful definition.”
The Chevron doctrine, also known as Chevron deference, originated in a 1984 Supreme Court case. Chevron USA, Inc. v. Natural Resources Defense Council, Inc.. In this case, the Supreme Court laid out the legal test that when the law is ambiguous, courts must defer to federal agencies’ interpretations.
Friday’s Supreme Court ruling comes as federal agencies are often criticized by conservative groups for reaching into areas over which they have no authority. The opinion also comes as the U.S. Securities and Exchange Commission is fighting cryptocurrency companies in court.
Judge Elena Kagen dissented.
“Today, the Court flips the script. With Congress out of the realm of interpretive discretion, it is now the ‘courts’ that wield the power. The rule of judicial humility gives way to the rule of judicial arrogance,” Kagan said in her dissent.
Massachusetts Democratic Sen. Elizabeth Warren called the Supreme Court ruling a “power grab.” post On Friday
“Corporate interests want extremist judges to write rules at the expense of consumers, workers, safety and the environment,” Warren said.
Cryptocurrency Effect
Amanda Tuminelli, chief legal officer of the DeFi Education Fund, said the Supreme Court’s decision benefits the cryptocurrency industry.
“This ruling means that regulatory agencies like the SEC and CFTC must be more cautious about expanding their regulatory scope without clear legal authorization, especially in new and rapidly evolving areas like cryptocurrencies and AI,” Tuminelli said in an emailed statement to The Block.
“The crypto industry can now be optimistic about cases moving through the court system, as the courts are now free to determine the most appropriate interpretation of the statutory law without having to give undue deference to the SEC’s interpretation,” Tuminelli added.
Tuminelli also said he hopes the ruling will lead to action in Congress. Lawmakers in Washington are currently working on several bills to regulate cryptocurrencies, including FIT21, which appears to be taking a comprehensive approach to writing rules for the industry. But such legislation never made it to President Joe Biden’s desk.
“We expect this ruling to not only lead to congressional action to clarify existing legal ambiguities, but also to significantly slow regulatory enforcement actions against the industry,” Tuminelli said.
When asked about the impact of the Supreme Court ruling on cryptocurrencies, Majority Leader Tom Emmer said it would have a direct impact on SEC Chairman Gary Gensler.
“The Supreme Court’s decision to overturn Chevron’s deference strikes down the regulatory abuses perpetrated by Gary Gensler and all the other unelected, unchecked bureaucrats who legislate by making rules,” Emmer said in an emailed statement.
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