Regulation
Supreme Court overturns Chevron deference, reshapes crypto policy
Photo by Brad Weaver on Unsplash.
Key points to remember
- Supreme Court’s reversal of Chevron decision limits SEC’s interpretive authority over cryptocurrencies.
- The decision requires judicial resolution of statutory ambiguities, which impacts broader regulatory practices.
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The U.S. Supreme Court’s 6-3 decision to strike down the Chevron Doctrine marks a significant shift in federal regulatory power, with potentially far-reaching implications for crypto policy.
The decision, led by Chief Justice John Roberts, dismantles a 40-year-old legal precedent that required courts to defer to federal agencies’ interpretations of ambiguous laws, which could have a substantial impact on the approach to the SEC regarding crypto policy.
Under the previous Chevron doctrine, agencies like the SEC had considerable discretion to interpret and apply laws in emerging industries like cryptocurrency. The new decision requires courts to exercise independent judgment in assessing whether agencies acted within their statutory authority.
For the crypto industry, which has faced regulatory uncertainty and aggressive enforcement actions from the SEC under Chairman Gary Gensler, the move could prove beneficial. It would mean agencies are now required to be more cautious about their regulatory reach, particularly in emerging technologies like crypto and AI.
By extension, the decision could also impact ongoing legal battles between the SEC and big crypto companies like Coinbase, Ripple, BinanceAnd KrakenThese companies argued that the SEC was overstepping its authority by classifying certain digital assets as securities.
Economist Timothy Peterson sees the decision as a victory for Bitcoin, arguing that it will prevent the SEC from acting as an automatic expert on crypto. The move could lead to greater scrutiny of the SEC’s regulatory stance and potentially fairer regulation.
“[The] The “Chevron” doctrine meant that the enforcement agency was automatically the subject matter expert. Today, that’s no longer the case. The Supreme Court has struck down Chevron deference, limiting the SEC’s unilateral interpretive power against Bitcoin. “All those ‘staff opinions’ that said ‘this is a security’? Gone,” Peterson said. on X.
Critics of the Chevron Doctrine, mostly conservatives, have long argued that it gives too much power to unelected regulators. But dissenting Justice Elena Kagan warned of a potential large-scale disruption of federal regulation.
The move is in line with recent views from figures like Balaji Srinivasan, who suggest that the Chevron takedown could accelerate innovation in heavily regulated industries, including crypto.
While the full impact of this decision on cryptocurrency regulation remains to be seen, it could potentially lead to more balanced regulatory approaches and encourage Congress to take explicit steps to clarify existing statutory ambiguities.
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