Crypto Kings No More How US Courts Hold the Scepter of Power in Shaping Crypto Policy

Exploring the Shift of Power to the Courts in Shaping US Crypto Policy

Picture this: the U.S. legal system, like a befuddled captain navigating treacherous waters, is facing an unprecedented challenge brought forth by the rise of blockchain and AI technology. If it fails to steer its ship in the right direction, the next decade of technological innovation may sail away to brighter shores, leaving the U.S. in its wake.

Now, before you start frantically searching for your life jacket, let me introduce you to Michele Benedetto Neitz, a Visiting Professor at the University of San Francisco School of Law and the Founder & Academic Director at the Blockchain Law for Social Good Center. She’s here to shed light on the state of affairs in her op-ed for CoinDesk’s “State of Crypto” Week, sponsored by Chainalysis.

So, what’s the situation, you ask? Well, it seems that the front line for creating laws for new technology is not the majestic halls of Congress. No, my friends, the real action is taking place in state legislatures, state agencies, and the courtrooms of state and federal judges. It’s like a decentralized battle royale for regulatory supremacy.

Why should you, a non-lawyer, care about this power struggle? Well, brace yourselves, because it affects more than just the blockchain industry. Emerging technologies like artificial intelligence are also caught in the whirlpool of fragmented regulation. It’s a bumpy ride, my friends.

• Europe’s Financial Regulatory Landscape: Balancing Security and Freedom
• Major Questions in the Crypto Industry: Separating Fact from Meme
• Blockchain and Digital Assets: Addressing the Elephant in the Room

Trend one: Congressional Inaction

As if Congress is too busy untangling metaphorical balls of yarn, they’ve been dragging their feet when it comes to creating a cohesive legislative framework for decentralized technologies and AI. That leaves a regulatory gap big enough to sail a fleet of pirate ships through.

So, who’s taking the reins? Drumroll, please… It’s the state legislatures, ladies and gentlemen! These bold decision-makers are regulating blockchain and digital asset companies with gusto, each according to their own state policies. It’s like a mad scientist experiment in democracy, with a pinch of chaos and a dash of consumer confusion.

Trend two: Decline of the Chevron Doctrine

Courts generally defer to the expertise of federal agencies when it comes to new technologies. But hold on tight, because it seems the era of deference is coming to an end. The Supreme Court, pondering the fate of the Chevron doctrine, is considering overturning its deferential stance.

If that happens, imagine a constellation of courts, each shining with its own interpretation of the law. Conflicting rulings will rain down like shooting stars, making legal compliance a minefield. Welcome to the era of powerful courts and mind-boggling legal confusion.

Trend three: Regulation by enforcement

Here’s a twist. Instead of sticking to the traditional rulemaking process, agencies have started relying on courts to establish policies. It’s like a game of judicial hot potato, with agencies tossing the decision-making responsibility to the nearest court. The SEC, in particular, has been criticized for its enforcement-heavy approach.

Now, imagine this: agencies giving up their own authority, leaving judges to wrestle with important legal issues while trying to keep their wigs in place. It’s like a legal version of “The Hunger Games,” where judges are the reluctant heroes thrust into the ring of uncertainty.

Where do we go from here?

Now that the stage is set, what’s the plan? Well, it’s time for state officials and judges to level up their tech skills. State legislators should allocate funds for themselves and state agencies to learn the intricacies of decentralized technologies and AI. Let’s create an army of tech-savvy lawmakers!

Law schools also have a role to play. They can host conferences and interdisciplinary trainings, where judges and state policymakers can get crash courses on emerging technologies. It’s like a boot camp for law and tech fusion.

But wait, there’s more! Let’s bring in the big guns – unbiased computer scientists and technical experts as advisors. Just imagine judges donning lab coats and pocket protectors, armed with knowledge to tackle the technical challenges that lie ahead.

Last but not least, it’s time to break down the barriers between federal, state, and local governments. Let’s create a vibrant learning community where diverse perspectives and voices can shape the laws on new technologies. Because there’s nothing worse than a room full of big voices and deep pockets drowning out the rest.

The legal system faces a mighty challenge, my friends. But fear not! By embracing tech education, integrating experts into decision-making, and fostering a collaborative spirit, we can ensure that the U.S. remains a leader in this ever-changing landscape.+

So, arm yourselves with knowledge and let’s steer this ship of innovation towards a bright and prosperous future. And remember, the waves of change may seem daunting, but together, we can ride them to success. Ahoy!

Edited by Ben Schiller.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!