The United States Supreme Court has made a significant decision that restricts federal agencies, like the Securities and Exchange Commission (SEC), from interpreting ambiguous laws through rulemaking. This ruling could be a win for the crypto industry, but how does it really help?

Advantages of the Supreme Court Ruling

In a 6-3 decision, the Supreme Court overturned the Chevron deference, a 1984 precedent that allowed agencies to interpret congressional laws at their discretion. Justice John Roberts stressed the need for courts to independently assess if agencies are acting within their legal boundaries. This ruling, based on the Administrative Procedures Act (APA), rejects automatic deference to agency interpretations due to statutory ambiguity.

This ruling has potential effects on legal disputes in the crypto sector. Ripple, currently in a legal battle with the SEC, could benefit from the reduced authority of agencies in making rules. Judge Torres overseeing the Ripple case would now have more freedom in interpreting the applicable laws. Similarly, prominent players like Coinbase and Uniswap Labs, facing SEC Wells Notices, might see a more favorable stance since the SEC’s case heavily hinges on the interpretation of the Howey Test.

Industry Experts Raise Questions About SEC’s Crypto Lawsuits

Market analyst Scott Melker points out the impact of the Supreme Court’s ruling on the SEC’s case against Coinbase. Melker suggests that the SEC’s case, largely based on applying the Howey Test to crypto assets, could lose significance following this ruling. If the SEC can no longer argue that crypto assets meet the Howey Test for securities, it casts doubt on the foundation of their case against Coinbase.

Ben Lilly from Jarvis Labs also argues that the laws regarding securities and cryptocurrencies are unclear. This ambiguity underscores the importance of independent judicial interpretation, a key aspect highlighted by the Supreme Court’s decision.

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