In a significant move, the United States Supreme Court has issued a ruling that limits the authority of federal agencies, including the Securities and Exchange Commission (SEC) to interpret laws deemed “ambiguous” through the rulemaking process. Given this development, the question is: is this ruling a victory for the crypto industry, and if so, how does it benefit the sector?
Benefits From Supreme Court Ruling
The 6-3 decision of the Supreme Court overruled the Chevron deference, a 1984 precedent that granted agencies discretion in interpreting congressional laws.
Justice John Roberts emphasized the importance of independent judgment by courts in determining whether agencies have acted within their statutory authority. The ruling, which cites the Administrative Procedures Act (APA), rejects the notion of blanket deference to agency interpretations solely based on statutory ambiguity.
Notably, the ruling has implications for ongoing legal battles within the crypto industry. Ripple, currently facing a lawsuit from the SEC, stands to benefit from the curtailed agency rulemaking authority. Judge Torres, presiding over the Ripple case, will now have greater independence in interpreting the relevant laws.
Similarly, major industry players like Coinbase and Uniswap Labs, who recently received Wells Notices from the SEC, may find themselves in a more favorable position as the SEC’s case relies heavily on the interpretation of the Howey Test.
Industry Experts Question SEC’s Crypto Cases
Market expert Scott Melker highlights the potential impact of the Supreme Court ruling 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 be rendered irrelevant in light of the ruling.
If the SEC cannot claim that crypto assets are securities under the Howey test, Melker said, it raises questions about the foundation of its case against Coinbase.
Ben Lilly of Jarvis Labs also contends that the securities law and statutes pertaining to cryptocurrencies are ambiguous. This ambiguity further highlights the importance of independent judicial interpretation, as emphasized by the Supreme Court ruling.
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