SEC and CFTC Pro-Crypto Rules Face Legal Uncertainty After Supreme Court Shift

Agencies move fast after Senate crypto bill stalls

Following the failure of the CLARITY cloture vote in the Senate, the SEC and CFTC quickly issued a series of pro-crypto rules. Two days after the vote, the SEC announced a five-year exemption allowing the issuing and trading of stock tokens. OKX partnered with ICE to begin trading 63 NYSE-listed stocks on-chain, and Securitize launched 12 tokenized stocks including Apple, Nvidia, and Microsoft.

The SEC also clarified that a crypto token does not become a security simply because a project buys back its own tokens, and stated that liquid staking tokens are not securities. It proposed new rules for crypto asset custody. The CFTC exempted some crypto software providers from registration and proposed a new "crypto asset market" registration category, while planning to allow leveraged trading on registered exchanges.

Can regulators really reverse course?

Industry watchers worry the rules may not last. TD Cowen has warned that agency rules "are the easiest to rescind," pointing to how Trump-appointed commissioners removed many regulations from the Gary Gensler era. A 2024 Supreme Court decision also makes it easier for courts to overturn agency rules.

Yuriy Brisov of D&A Partners told Cointelegraph Magazine that while agencies have the power to create rules under the Exchange Act of 1934, that power is not unlimited. If regulations place an "unbearable economic burden" on companies or harm the market, businesses can challenge them in court. He cited the 2011 Business Roundtable vs. SEC case, where the business community successfully challenged SEC proxy voting rules as burdensome.

What the Supreme Court change means

Brisov explained that the 2024 Loper Bright decision overruled Chevron, a 1984 precedent that required courts to defer to an agency's interpretation when a law was vague. Under the new standard, courts will apply their own judgment rather than automatically deferring to the SEC or CFTC. This means regulators' rules face a higher bar in court.

FAQs carry less weight than rules

Brisov also cautioned against treating SEC FAQs as firm guidance. When the SEC issued an FAQ saying token buybacks don't make a commodity a security, he noted it was "not legislation" — more like a staff manual that can be rewritten at any time. He pointed out that the FAQ was already revised within a week after a16z's legal counsel identified a loophole.

Companies building on the rules should proceed carefully

If the current rules hold for two years and businesses invest heavily in infrastructure built around them, Brisov said a future SEC could not simply wipe them away. Any reversal would require transparent reasoning, economic justification, and proof that the prior rules were insufficient. He noted that SEC Chair Paul Atkins has been consulting with crypto firms and venture capital firms, which suggests the current rules are based on research rather than being created overnight.

Why this matters for crypto businesses

The legal landscape for US crypto regulation remains fluid. While the current SEC and CFTC rules are more favorable to the industry than previous approaches, their longevity is uncertain. Companies building tokenized stock platforms or launching buyback programs should understand that FAQs and guidance documents can change, and court challenges could reshape the regulatory framework.

Current legal tests

The durability of agency rulemaking is already being tested. A community bank group is suing the Office of the Comptroller of the Currency for exceeding its authority by allowing crypto firms to obtain national trust bank charters. That case could set a precedent for how aggressively courts review agency crypto rules.

• Cointelegraph