Supreme Court Overturns ‘Chevron Deference’—And That Might Be Good for Crypto

The crypto industry was quick to celebrate a Supreme Court ruling Friday that abolished “Chevron deference,” a move giving the federal courts more say in determining the scope of what administrative agencies can do.The While several legal scholars told The scope of the SEC’s authority in regulating crypto is still tied to questions around their classification as securities, he said in an interview.“The core issue is, ‘Is crypto a security, or is it not?’” he said. “This doesn’t really have any bearing on that. That question is a matter of a legal interpretation, not a matter of an agency overstepping its bounds.”In SEC lawsuits against exchanges and issuers of digital assets, the dividing line between securities and commodities is still unclear. Yet the overturning of Chevron deference could give more discretion to conservative courts with crypto issues before them, he acknowledged.“I don’t think it’ll have any sort of tangible implications in the near term,” Reiners continued. Still, statutory limits on the SEC’s authority to regulate crypto have been argued by crypto firms before. In an attempt to have an SEC-brought lawsuit tossed last year, the crypto exchange Coinbase argued that the SEC was Coinbase’s argument was that Congress had not delegated the SEC authority to regulate crypto under the Securities and Exchange Act of 1933—because digital assets don’t fit within the agency’s framework for securities, known as the “We appreciate the Supreme Court’s recognition that the Administrative Procedure Act is a check on agencies,” a Coinbase spokesperson told Sheila Warren, CEO of the Crypto Council for Innovation, told “Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.” The writing is on the wall.— paulgrewal.eth (@iampaulgrewal) June 28, 2024The ruling’s significance was echoed by Coinbase’s Chief Legal Officer Paul Grewal, who wrote on Twitter (aka X) that “the writing is on the wall,” pointing to a snippet from Friday’s decision, which stated that “agencies have no special competence in resolving statutory ambiguities.”On Thursday, the conservative-leaning Supreme Court imposed new standards on the SEC in a more direct way. In another 6-3 ruling, the court held in SEC v. Jarkesy that in enforcement actions seeking monetary penalties, SEC targets have a right to a jury trial.Overall, Friday’s ruling may bolster arguments that the SEC is overstepping its authority, Syracuse University College of Law Professor Jack Graves told “The SEC is essentially just applying precedents and Howey,” he said of SEC enforcement actions against crypto firms. But Friday’s ruling strengthens the Major Questions argument, Graves said, adding that “the further the Supreme Court gets away from regulatory deference, the stronger that argument becomes.”Edited by Andrew Hayward