Earlier in June, the Supreme Court abolished the Chevron doctrine—leaving the Securities and Exchange Commission with tools that would have been key in standing athwart crypto.
What do fishing boats, truck stops, and the Securities and Exchange Commission (SEC) have in common? Quite a bit if you’ve been following recent decisions of the United States Supreme Court.
In a case fast becoming a turning point for the federal government’s authority to regulate tech start-ups, SCOTUS handed down a June 28 decision — Loper Bright Enterprises v. Raimondo — that created two new avenues to challenge federal agencies that have tried to increase their reach to crypto.
Crypto start-ups have battled with this grey area for years. The Securities and Exchange Commission, the Commodity Futures Trading Commission, the Treasury Department, and a host of others have all tried to broaden their scope into this white-hot, highly innovative sector. Most start-ups go through a flurry of compliance challenges, and crypto perhaps has gone through the most. For example, inappropriate regulatory incentives and primitive defaults in today’s regulatory landscape hinder startups pushing DeFi. Although DeFi has the potential to increase financial access for the unbanked radically and to transform the basis of our financial system, regulators do not have a clue how to categorize the services that are enabled by DeFi. Sometimes they are treated as if they are traditional financial products, and sometimes they are not. It is exactly this uncertainty that has been making it so difficult to build and operate DeFi startups compliantly. All growth and innovation in this space came anyway, in spite of these headwinds.
Image: https://s3.cointelegraph.com/uploads/2024-07/8c302bfd-7d71-483e-9426-0246db63ba18.jpg
And for decades, this has meant federal courts have defaulted to never second-guessing the agencies on interpretations of unclear statutes. This default, known as “Chevron deference,” meant that courts would defer, for instance, to Treasury Department interpretations of ambiguities in the Bank Secrecy Act whether or not the court itself agreed with the interpretation.
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