Key Points:

  • Supreme Court ruling weakens federal agencies' interpretive authority.

  • SEC's regulation of fast-developing markets may be hindered.

  • The ruling may affect SEC's case against Coinbase and new climate rules.

A Supreme Court ruling weakens Chevron deference, potentially affecting SEC regulations. Due to reduced SEC power, Wall Street crypto might benefit.

Wall Street Crypto Is Poised To Win More Battles With SEC: Report

The ruling could be a boon to Wall Street as it continues to clash with the US Securities and Exchange Commission. The Supreme Court decision weakened a legal doctrine known as Chevron deference that has generally given federal agencies wide latitude when it comes to interpreting the law.

Wall Street Crypto and Other Areas Impacted by SEC's Reduced Discretion

According to BBG, the 6-3 ruling could fuel challenges to the SEC's efforts on issues ranging from cryptocurrency to insider trading. This also occurs when the SEC, under Chair Gary Gensler, is rolling out perhaps the most comprehensive and controversial set of regulations in decades.

Gordon Todd, a partner at Sidley Austin, called the Supreme Court decision a "sea change". He said Chevron's deference had been implicitly or explicitly embedded in most federal agencies' regulations and rulemaking processes.

Additionally, this reduced discretion could particularly affect the SEC, which relies heavily on interpreting and applying old laws.

Readmore: SEC Sues Consensys Over MetaMask Ethereum Staking Service

The Long-Term Implications of Shift in SEC's Rulemaking and Regulations

Ty Gellasch, executive director of the Healthy Markets Association, warned that for the SEC to have less deference will impede its potential to keep pace with fast-developing markets. He said any change in law takes a long time and is very tedious; besides, it favours those with money.

The areas likely to be most affected will include the SEC's Enforcement case against cryptocurrency giant Coinbase Global Inc. and the SEC's new climate reporting rules for public companies. Also, new barriers may come before the SEC's rules that compel hedge funds to disclose more information about fees and expenses to investors.

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