The latest Supreme Court ruling from the Environmental Protection Agency (EPA) has many implications for financial markets. Cryptocurrency fans in particular may be the unintended beneficiaries of the decision. So what does the EPA decision mean for crypto?
Well, the 6-3 decision of West Virginia vs. EPA essentially limits the EPA’s power to regulate carbon emissions from coal and gas-fired power plants. However, many lawyers and analysts see the decision having wider implications. The decision can be interpreted as an indication that regulators as a whole may be limited in expanding the scope of their domain.
Cryptocurrency fans have long feared a wave of regulatory scrutiny. Bodies like the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have long-standing complaints about digital assets. The EPA verdict may actually come as a relief to those worried about the future of crypto.
Jake Chervinsky, chief policy officer for the Blockchain Association, commented on the verdict. “The EPA’s decision signals that the Supreme Court won’t take kindly to regulators like the SEC that attempt to redraw their own jurisdictional boundaries beyond what Congress clearly intended.”
The SEC has been chasing the crypto tail for years now. This week’s EPA verdict could change all that.
What does the EPA decision mean for crypto?
According to the ruling, government agencies attempting to regulate a department of substantial importance need “clear authorization from Congress.” So far, the SEC has attempted to rule crypto largely by treating digital assets and their providers like traditional financial products.
The SEC’s ongoing lawsuit against Ripple will set a major precedent for crypto regulation in the future. The SEC accused the blockchain company of failing to register its crypto brand, XRP (XRP-USD), as a guarantee.
Jason Gottlieb, Partner at Morrison Cohen LLPbelieves that a major reversal of regulatory clearance could be a very real possibility.
But if the [Ripple] the case goes all the way to the Supreme Court, there could be a frontal attack on [Securities and Exchange Commission v. W. J. Howey Co.] – like what happened to Roe v. Wade. If the Court were to decide that the question in Ripple is not whether XRP is a security, but rather, “Does the SEC have the power to set policy for the future of finance”, she would certainly find this to be a “major question” .
In fact, the SEC has a number of crypto-related lawsuits about its role. If any of its decisions were to boil down to a Supreme Court ruling, the agency could be stripped of much of its authority.
As of the date of publication, Shrey Dua did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.