US Supreme Court Agree to Hear a Case that Could Wreck the SEC's Regulatory Authority

TL:DR Two days ago the Supreme Court said it was going to revisit the court case that led to regulatory bodies like the SEC being able to expand its power into things like cryptocurrencies that they initially were not in charge of by stating that well it's based on history. If the court changes its mind, which they have shown interest in, the SEC and most importantly Gary Gensler would not be allowed to legal action against crypto companies! Congress would have to pass some sort of legislation in the space creating the rules the industry has asked for!

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Two days ago the US Supreme Court announced its decision to hear/revisit the landmark case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. While the company involved is an energy stock and the subject matter was over fishery's protection it established what is known as "Chevron deference". The outcome of this case set the legal test for determining whether to grant deference to a government agency's interpretations of a statute it is in charge of. Chevron deference is a two-part test applied by the court that first checks to see whether Congress has spoken directly to the precise issue in question and two whether the agency's answer is based on a permissible construction of the statute.

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This 1984 decision gave the EPA and thus all subsequent agencies like the SEC the ability to freely interpret any statute (law) as they saw fit within the scope of what it administers. Since this decision whenever companies or other groups would file lawsuits against agencies like the EPA or SEC, the court would apply the Chevron deference standard and more often than not side with the regulatory bodies. Last year though also in the Supreme Court, we saw them deviate some from this standard with the West Virgina v. EPA case in which the Supreme Court sided with West Virgina about Congress being the standards setters on national greenhouse gas emissions coming from power plants.

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By revisiting the Chevron case the Supreme Court could change course and strike down the idea of Chevron deference. If this happens all of the rules and legislation that SEC Chair Gary Gensler has pointed at from around 1938 get thrown out the window and the SEC will become powerless over cryptocurrency since the idea and the internet were not even a thing back then! This would stop the craziness of the SEC right in its tracks and allow for clarity and sanity to return to the US. Naturally, this would be a huge win for crypto in the US and really the world as the backward logic the SEC uses will halt immediately.