Securities and Exchange Commission (SEC) Chairman Gary Gensler’s ongoing regulatory campaign against the cryptocurrency industry he calls “the Wild West of finance” may have just run into trouble in court supreme.

While the 6-3 ruling dealt with a case involving the ability of the Environmental Protection Agency (EPA) to regulate air pollution, the court returned a settlement that would cap carbon dioxide emissions at a level that would significantly reduce the amount of coal-fired electricity to a federal appeals court.

But the court’s majority opinion in West Virginia v. EPA was broad enough to significantly narrow the way agencies like the SEC exercise their regulatory authority outside of Congressional control.

This could well impact the cryptocurrency industry, which is regulated by agencies trying to force it to abide by an existing set of regulations it doesn’t match, crypto industry advocates claim. For years.

“Today’s #SCOTUS ruling challenges the enforcement-by-enforcement approach that the digital asset industry has been forced to navigate,” Perianne Boring, CEO of the Chamber of Digital Commerce, an association of the crypto industry, said on Twitter. “Without clear authorization from Congress, federal agencies must exercise caution.”

Today #SCOTUS The decision challenges the regulation-by-enforcement approach that the digital asset industry has been forced to navigate. Without clear authorization from Congress, federal agencies must exercise caution. https://t.co/6iFcaTPAHt

— Perianne (@PerianneDC) June 30, 2022

In a statement to CNBC, she added that the decision “should at the very least give regulators pause in trying to establish policies that go beyond their congressionally mandated roles, especially with emerging innovations with great economic potential.” “.

Specifically, the industry opposes the SEC’s ruling that virtually all cryptocurrencies are securities subject to its jurisdiction. This led to enforcement actions that effectively ended the initial coin offering (ICO) that funded industry growth during the first major crypto boom in 2017-2018.

It’s an argument Gensler lost recently, after a bipartisan Senate bill recommended giving control of most cryptocurrencies to the Commodity Futures Trading Commission (CFTC).

Read more: SEC Chairman: All Agencies Regulating Crypto Should Follow “One Rulebook”

Hostility on both sides

More recently, the SEC used authority it claimed to clamp down on the crypto credit industry — forcing Coinbase to back down from plans to enter it and forcing BlockFi to agree to a $100 million settlement — with its continued denial. to authorize a bitcoin spot exchange-traded fund (ETF).

One of the things that outraged Coinbase CEO Brian Armstrong was that the agency reportedly didn’t even explain why it was threatening to sue the leading crypto exchange if it launched Coinbase Lend, which allegedly offered customers up to 4% annual return for deposits.

See also: SEC campaign against crypto lending extends beyond Coinbase

In a July 1 Twitter thread of the SEC’s enforcement rulings this year, attorney Jake Chervinsky, chief policy officer at the Blockchain Association, wrote, “Across government, almost everyone is aligned behind the smart national strategy. who [President Joe Biden set out in an executive order about crypto regulation] proceed thoughtfully and act deliberately. And almost everyone understands that only Congress can answer major questions like how to regulate crypto.

Everyone “except the SEC,” he added.

1/ On what to expect from the SEC:

Despite all the fears and predictions of a “regulatory crackdown” on crypto in the US, and despite historically bad market conditions (to put it lightly), we haven’t seen any major government action at first. semester 2022. I feel good about it.

H2 2022 could be different.

—Jake Chervinsky (@jchervinsky) July 1, 2022

“We’ve all seen the SEC’s overt hostility to crypto in the first half…Unfortunately, I expect it to get worse in the second half,” Chervinsky wrote. “The SEC appears to be waging the war on crypto on two fronts: rulemaking and enforcement.”

In a statement to CNBC after the EPA ruling, Chervinsky said “the ruling signals that the Supreme Court will resent regulatory agencies like the SEC that attempt to redraw their own jurisdictional boundaries beyond what Congress had clearly planned.”

He added that he thinks the Supreme Court is likely to strike down the rules the SEC has proposed and applied to the crypto industry.

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