In a significant move, the U.S. Supreme Court has issued a ruling that limits the power of federal agencies, including the Securities and Exchange Commission (SEC), to interpret laws deemed “ambiguous” during the rulemaking process. Given this development, the question is: Is this decision a win for the crypto industry, and if so, what are the benefits for the sector?
The benefits of the Supreme Court decision
The Supreme Court’s 6-3 decision canceled Chevron deference, a 1984 precedent that granted agencies discretion in interpreting congressional laws.
Justice John Roberts underlines the importance of independent judgment by courts in determining whether agencies acted within their statutory authority. The decision, which cites the Administrative Procedure Act (APA), rejects the notion of general deference to agency interpretations based solely on statutory ambiguity.
It should be noted that this decision has implications for ongoing legal battles within the cryptocurrency industry. Ripple, which is currently facing a lawsuit from the SEC, stands to benefit from the agency’s reduction in regulatory authority. Judge Torres, who is presiding over the Ripple case, will now have greater independence in interpreting the relevant laws.
Similarly, major industry players like Coinbase and Uniswap Labs, which recently received Wells notices from the SEC, may find themselves in a more favorable position because the SEC’s case hinges heavily on the interpretation of the Howey test.
Industry Experts Question SEC Crypto Cases
Market Expert Scott Melker strong points the potential impact of the Supreme Court’s decision on the SEC’s case against Coinbase. Melker argues that the SEC’s case, largely based on the application of the Howey test to crypto assets, could become irrelevant in light of the decision.
If the SEC cannot claim that crypto assets are securities under the Howey test, Melker said, that raises questions about the basis of its case against Coinbase.
Ben Lilly from Jarvis Labs also dispute that the securities law and statutes relating to cryptocurrencies are ambiguous. This ambiguity further highlights the importance of independent judicial interpretation, as highlighted in the Supreme Court’s decision.
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