Over the past week, the United States Supreme Court (SCOTUS) has issued two significant rulings that may profoundly affect the enforcement strategies of the U.S. Securities and Exchange Commission (SEC), particularly concerning cryptocurrency enterprises.
On June 27, in a landmark 6-3 verdict for the case **SEC v. Jarksey**, the justices determined that parties accused of securities fraud in SEC civil litigation are entitled to a jury trial, as opposed to being judged solely by an administrative law judge. The conservative justices underscored the importance of adhering to traditional fraud principles within federal securities law, effectively likening SEC civil fraud cases to criminal fraud proceedings.
The following day, SCOTUS delivered another pivotal opinion in **Loper Bright Enterprises v. Raimondo**, which effectively nullified the 1984 Chevron deference precedent. This principle had previously allowed courts to defer to federal agencies’ legal interpretations. The new ruling mandates that lower courts independently assess whether an agency’s actions fall within its legal boundaries, without defaulting to the agency’s own interpretations.
Sheila Warren, CEO of the Crypto Council for Innovation, emphasized to Cointelegraph the critical nature of these decisions for the cryptocurrency sector, noting that the authority and influence of regulatory bodies like the SEC could be challenged if courts are empowered to intervene.
In her dissenting opinion on the **SEC v. Jarksey** case, Justice Sonia Sotomayor characterized the majority’s stance as an encroachment on the legislative powers of the U.S. Congress. Similarly, Justice Elena Kagan, dissenting in the **Loper** case, accused the majority of habitually overturning established laws and dismantling a fundamental aspect of administrative law.
Joseph Lynyak, a partner at the global law firm Dorsey & Whitney, warned that the judicial system might become overloaded with litigation as a result of these decisions, as parties may now repeatedly challenge agency interpretations, potentially leading to inconsistent rulings across lower courts.
Representative Maxine Waters expressed concern on June 28, stating that the Supreme Court’s decisions have disrupted decades of legal precedent established by the Chevron doctrine, thereby simplifying the process for large corporations to avoid civil penalties and disadvantage the general public.
In related news, the EU’s MiCA stablecoin regulations have been enacted, as reported in ‘Law Decoded.’
As the Supreme Court’s term drew to a close, it rendered several judgments with potential long-term consequences for both the SEC and the U.S. presidency. Notably, on July 1, the justices ruled 6-3 that former President Donald Trump is presumed to have immunity from prosecution for his actions while in office. Trump, who is seeking reelection in 2024 and has the distinction of being the first candidate with a criminal record, is accused of misusing his presidential authority to influence the outcome of the 2020 election.
These Supreme Court decisions coincided with the SEC initiating an enforcement action against Consensys, the parent company of MetaMask. The agency contends that Consensys acted as an unregistered broker and unlawfully offered and sold securities through MetaMask Swaps.
In the magazine feature ‘Godzilla vs. Kong: SEC faces fierce battle against crypto’s legal firepower,’ the ongoing struggle between the SEC and the robust legal defenses of the cryptocurrency industry is highlighted.