Crypto-regulation is facing an even steeper rise following the EPA decision from the Supreme Court
This week’s Supreme Court ruling limiting the Environmental Protection Agency’s authority may have a surprising advantage: cryptocurrency investors wanting to avoid federal regulation.
The case before the court was about climate regulations from the EPA, but lawyers and lobbyists representing unrelated industries followed it closely to see what broader statements judges can make about the power of an expanding bureaucracy – especially for new industries such as crypto.
Because bitcoin and similar digital currencies are so new, there is no specific federal law that regulates them. In that absence, two regulatory agencies, the Securities and Exchange Commission and the Commodity Futures Trading Commission, have taken significant steps towards overseeing crypto.
“The EPA decision signals that the Supreme Court will not take kindness to regulatory agencies such as the SEC that seek to redraw their own jurisdictional boundaries beyond what Congress clearly intended,” Jake Chervinsky, head of policy for the Blockchain Association, a crypto-trading group, said in a statement. He said that based on the decision, he believes the Supreme Court will crack down on proposed SEC rules for the crypto market.
Perianne Boring, founder and CEO of the Chamber of Digital Commerce, a separate trading group for the blockchain and crypto industry, said she was also encouraged by the ruling, which found that the federal Clean Air Act does not give the EPA broad authority to regulate greenhouse gases. gas emissions.
“Today’s decision in West Virginia v. EPA should at least give regulators a break in trying to set guidelines that go beyond their congressional mandate roles, especially with new innovations with great economic potential,” she said in a statement Thursday.
In its decision against the EPA, Chief John Roberts wrote for a 6-3 majority that when a government body seeks to regulate an area of great importance, it must point to “clear congressional authorization.”
Crypto investors and startups have been in a state of excitement for a few years while waiting to see how the US government will approach digital currency regulation, which has grown from almost nothing to a trillion-dollar industry over a few years, large seen without state supervision.
A third industry representative, Sheila Warren, CEO of the Crypto Council for Innovation, said that the implications for crypto are not clear.
“The trend from this SCOTUS is towards eroding the power of administrative agencies to create and enforce broad rules at the federal level,” she said in a statement, with the acronym for the US Supreme Court.
“That said, it’s hard to know how different agencies will react,” she said. “I do not think federal agency regulations are off the table in the digital assets area, but I think this ruling is an indicator that SCOTUS will be a barrier for agencies trying to establish a broad federal policy, especially in areas where the state has expressed interest in. ”
James Cox, a law professor at Duke University and an expert on securities regulation, said he believes Thursday’s ruling “will really be taken to move many regulators of their tracks”, including rules for new financial products such as virtual currencys and coin offerings.
But the SEC could benefit from the doubt from federal courts because of federal laws that give the commission broad authority over “investment contracts,” said Carol Goforth, a law professor at the University of Arkansas and another securities regulator.
“I do not see the court (or most federal court judges for that matter) being overly concerned that the SEC is operating too broadly, especially given various headlines about widespread crypto fraud,” she said in an email.
The CFTC and the SEC did not immediately respond to requests for comment.
