The United States Supreme Court’s ruling in the Loper Bright vs. Raimondo case heralds a seismic shift for the cryptocurrency sector. This pivotal decision redefines the interplay of power between the judicial and executive branches of the U.S. government.

With the 6–3 verdict, U.S. courts are no longer mandated to “defer” to federal agencies when interpreting ambiguous statutes, a precedent set by the 1984 Chevron USA Inc. vs. Natural Resources Defense Council decision.

“Chevron is overruled,” proclaimed the court on June 28.

The ramifications of this ruling are extensive. “This decision reverberates throughout the administrative state, impacting not just technology, but also finance, healthcare, the environment, and more,” stated Jim Lundy, securities enforcement and litigation partner at Foley & Lardner and former senior regulatory counsel at the U.S. Securities and Exchange Commission, in an interview with Cointelegraph. Lundy added:

“The Supreme Court acted appropriately with this ruling as the Chevron deference had begun to extend too far for certain agencies.”

The long-term implications of Loper Bright are profound, according to Joshua Simmons, partner at Wiley Rein and adjunct professor at the University of Virginia School of Law.

Simmons characterized the ruling as a “game changer” for the crypto and blockchain sectors.

“The decision removes the deference that agencies enjoyed,” Simmons told Cointelegraph. “Practically, this means more companies will challenge agencies, and when they do, they will face a more balanced playing field.”

SEC’s Authority Questioned

Joanna Wasick, a litigation partner in BakerHostetler’s New York office, highlighted the oral arguments before the Supreme Court. She told Cointelegraph:

“Loper Bright’s attorney, Paul Clement, used crypto as an example of the SEC overstepping its authority. While crypto wasn’t the issue at hand, the arguments made may influence future rulings.”

The Supreme Court’s decision could spur Congress to enact crypto reform legislation, Simmons suggested, and embolden crypto and blockchain companies to pursue legal challenges. It also “validates” existing challenges against agencies, such as Coinbase vs. SEC in the U.S. Court of Appeals for the Third Circuit (with Wiley Rein authoring an amicus brief for Coinbase), and could bolster crypto software firm Consensys in its conflict with the SEC.

Peter Van Valkenburgh recently noted in a Coin Center blog:

Without Chevron, a judge in SEC v. Consensys need not defer to the SEC’s interpretation of what constitutes a ‘broker’ and whether it includes developers of a wallet like Metamask. The judge can independently interpret the law.

Uniswap Labs referenced Loper Bright in a July 9 letter urging the SEC to retract its proposal to regulate decentralized finance. “The Commission drafted the proposed amendments against a legal backdrop that no longer exists,” it wrote.

Other federal agencies, beyond the SEC, may also feel the impact of Loper. Custodia, a state-chartered crypto bank, recently appealed the Federal Reserve’s denial of its application for a Fed Master Account, citing the Loper decision.