The U.S. Supreme Court, in a historic decision, overturned the Chevron doctrine, a 40-year rule that allowed federal agencies to interpret unclear laws, thereby curbing the arbitrary powers of agencies. In a 6-3 decision vote, the court’s conservative majority ruled that judges should no longer defer to federal agencies’ interpretations when laws are unclear.
The decision will have a landmark impact on various sectors from banking to crypto to pharmaceuticals to narcotics control where earlier federal agencies had sweeping powers to interpret laws.
The Chevron doctrine originated from the 1984 case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., which mandated that unclear laws were to be interpreted by federal agencies. Chief Justice Roberts said, “Chevron is unworkable,” while arguing that courts must not blindly follow agencies’ interpretation of statutes.
Amanda Tuminelli, chief legal officer at the DeFi Education Fund, noted that agencies like the SEC and CFTC should be cautious in extending their regulatory reach without clear statutory authorization.
According to House Majority Whip Tom Emmer, it would affect SEC Chair Gary Gensler to eliminate what he described as regulatory abuses, on the other hand, Justice Elena Kagan, in her opinion, considered the decision as elevating judicial power, they disintegrate the role of federal agencies and their experienced expertise.
Lawmakers are crafting bills like FIT21 to establish clear industry rules that have yet to reach President Biden’s desk. Non-crypto business areas expected to be affected by the decision include the environment, and drugs, among others. The court has been steadily dismantling the forms of power of federal agencies for several years and this process is unlikely to stop.
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