Deaton Reacts as US Supreme Court Admits Case That May Limit SEC’s Authority

Pro-XRP lawyer John Deaton identifies the potential impact of a case recently admitted by the U.S. Supreme Court, which could limit the SEC’s authority.

The U.S. Supreme Court has agreed to hear a case that could curtail the powers of the Securities and Exchange Commission (SEC). This news has garnered considerable attention within the cryptocurrency and XRP communities, with attorney John Deaton identifying its potential impact.

The SEC Case

Recently reported by Reuters, the case accepted by the Supreme Court revolves around a challenge to certain SEC in-house enforcement proceedings. The case centers on a hedge fund manager named George Jarkesy, whom was fined and banned from the industry by the SEC for securities fraud.

A lower court had previously ruled that the SEC’s proceedings violated the constitutional rights of individuals involved, including the right to a jury trial and encroachments upon presidential and congressional powers. 

This decision to review the lower court’s ruling has significant implications for the regulatory landscape and the power wielded by federal agencies like the SEC. The outcome of this case could restrict the SEC’s reach and set a precedent for similar challenges in the future.

Deaton Reacts

Deaton recently reacted to the Supreme Court’s admission, emphasizing its potential significance. “THIS IS A BIG DEAL,” the pro-XRP lawyer exclaimed in a tweet.

THIS IS A BIG DEAL

This morning on @Crypto_TownHall we were discussing the Major Questions Doctrine and the @coinbase case against the @SECGov. This is another example of this Supreme Court making the writing on the wall very clear potentially impacting an interlocutory appeal. https://t.co/uqTfDwbZCO

— John E Deaton (@JohnEDeaton1) June 30, 2023

Deaton revealed that he and others had been discussing Coinbase’s case with the SEC and the role of the Major Questions Doctrine in the crypto industry, especially concerning the SEC’s perceived overreach.

The “Major Questions Doctrine” is a legal principle that states that when statutes or regulations involve important policy, Congress should interpret them instead of administrative agencies like the SEC. It discourages the interpretation of these laws, which could be ambiguous, by agencies like the SEC.

The crypto community shares the belief that the SEC has been overstepping its boundaries and that its regulatory powers should be subject to limitations. Rep. Warren Davidson recently introduced a bill to fire SEC Chair Gary Gensler in response to these criticisms.

The ongoing Ripple vs. SEC lawsuit has already fueled discussions about the role of regulatory agencies in the cryptocurrency industry, and this recent development further reinforces the need for a careful examination of their authority.

While it remains to be seen how the Supreme Court will rule on this case, the fact that it has been taken up for consideration speaks to the growing scrutiny of federal agencies and the desire for greater clarity in their regulatory practices.