Legal Parallels in Cryptocurrency Regulation
Paul Grewal, the Chief Legal Officer at Coinbase, recently drew parallels between the legal situation involving tariffs set by the Trump Administration and the Securities and Exchange Commission’s (SEC) historical position regarding its authority over cryptocurrency regulations. He remarked on social media that as time passes, the irrationality of those past decisions becomes increasingly evident.
Recent Court Ruling and Its Implications
A recent ruling from a U.S. Federal Appeals Court has prompted commentators to notice connections between the conduct of the previous president and the SEC’s management of digital assets. The court’s decision to overturn several tariffs instituted by Trump highlighted an unprecedented use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, a move that no past president had undertaken.
In its decision, the court emphasized that any delegation of tariff imposition power must come expressly from Congress. Grewal argued that this reasoning directly opposes the actions taken by SEC Chair Gary Gensler, who has been accused of overstepping Congress’s jurisdiction in regulating cryptocurrency transactions as securities.
Major Questions Doctrine and SEC’s Authority
Grewal pointed out that the ruling applies the major questions doctrine, a critical aspect of Coinbase’s previous legal challenges against the SEC. This doctrine suggests that significant issues—especially those involving broad governmental authority—should be explicitly authorized by Congress rather than assumed.
He criticized the SEC for its attempts to assert control over transactions that were unregulated by any contract, stating that Gensler’s office is effectively claiming jurisdiction even where no contractual obligations exist.
Call for Legislative Action
To mitigate future disputes of this nature, Grewal has called on Congress to unify in the passage of market structure legislation that would clarify the regulatory landscape for the cryptocurrency sector.
“The absurdity of that era grows clearer and clearer even as it recedes into history,”
he summarized, further stressing the need for constructive legislative engagement.
For further information, please check out the article on Coinbase urging the court to consider dismissing the SEC case due to claims of the agency exceeding its authority.
