In a landmark decision on June 28, the United States Supreme Court significantly altered the landscape of administrative law by overturning the 40-year-old Chevron doctrine. This ruling, delivered in a 6-3 vote, is poised to impact the regulatory actions of federal agencies, including those of the Securities and Exchange Commission (SEC) concerning cryptocurrencies.

The Chevron doctrine, established in 1984, allowed federal agencies to interpret ambiguous laws, assuming they were experts in their respective fields. However, the Supreme Court's recent decision has curtailed this authority, marking a pivotal shift in how regulations are applied and enforced.

"This decision puts an end to what was a cornerstone of administrative law and regulation," Justin Slaughter, policy director at venture firm Paradigm, commented on X (formerly Twitter). He elaborated that agencies previously had the latitude to apply outdated laws to new subjects with the confidence that courts would uphold any reasonable interpretation. Now, this pathway is considerably less certain.

Slaughter clarified that while the court did not prohibit Congress from delegating rulemaking powers to agencies, it stipulated that such delegations must be "expressly delegated." This change emphasizes the need for clear legislative direction, potentially limiting the SEC's ability to unilaterally interpret and enforce regulations on emerging technologies like cryptocurrencies.

"Chevron is all about regulations, not enforcement," Slaughter added. "Some clever folks on the left have figured a way to dodge the Court cracking down on Chevron by focusing on enforcement actions. Such as the SEC on crypto." This distinction suggests that while regulatory agencies can still pursue enforcement actions, they may face more stringent judicial scrutiny when interpreting ambiguous laws.

The DeFi Education Fund, a crypto advocacy group, had previously outlined the implications of overturning the Chevron doctrine. They noted that courts would now "choose the most compelling interpretation [of a law] rather than automatically deferring to an agency’s interpretation." This shift is expected to benefit the crypto industry, which has often found itself at odds with regulatory interpretations that some argue stifle innovation.

The Supreme Court's decision could lead to a more balanced regulatory environment, where the judiciary plays a more active role in determining the application of laws to new technologies. For the crypto industry, this ruling is seen as a win, offering a potential reprieve from what many perceive as overreach by regulatory bodies like the SEC.

As the legal landscape evolves, this decision underscores the importance of clear and precise legislative guidance in regulating emerging technologies. The crypto industry, advocates argue, could thrive in an environment where regulations are applied consistently and transparently, fostering innovation while ensuring compliance with established legal frameworks.