SCOTUS Ruling on EPA Overreach Could Be Boon for Crypto

The SEC continues to try to expand its dominion over crypto through “regulation by enforcement” but a Supreme Court decision limiting the EPA’s authority may trip the agency up.

The US regulator to continue attempting to expand its authority over the industry amid regulatory uncertainty, industry watchers say.

Regulation by enforcement will continue in the absence of concrete crypto legal frameworks, according to industry executives and lawyers, as regulators are seeking to spotlight recent investor protection issues in the space. 

With all the turmoil from the summer’s slate of Supreme Court decisions, it went largely unnoticed that the 6-3 ruling of West Virginia v. EPA could have severe consequences for the SEC.

The crypto industry can prod Washington regulators for tailored rules and regulations all it wants. It won’t be on terra firma until there’s a digital asset law on the books. That’s the lesson crypto and Web3 lobbyists should be taking from a Supreme Court ruling that stripped the Environmental Protection Agency’s ability to regulate greenhouse gas-spewing power plants under the 52-year-old Clean Air Act.

Because there are no specific federal laws governing crypto, the SEC and the Commodity Future Trading Commission have taken ambitious steps to regulate crypto. They may be overstepping.

“The EPA decision signals that the Supreme Court won’t take kindly to regulatory agencies like the SEC attempting to redraw their own jurisdictional boundaries beyond what Congress clearly intended,” Jake Chervinsky, head of policy for the Blockchain Association, a crypto trade group, said in a statement. He said that based on the decision, he believes the Supreme Court would strike down proposed SEC rules for the crypto market. 

Bottom line, the ruling against the EPA may read as an indication that regulatory agencies are limited in expanding their regulatory powers without formal legislative authority from Congress. The SEC is attempting to redraw their own jurisdictional boundaries beyond what Congress has authorized and we believe it should be challenged.