The recent Supreme Court decision to overturn the 91-year-old Humphrey’s Executor precedent allows U.S. presidents to remove independent agency heads at will. This ruling will radically change the way cryptocurrency regulation is conducted and could have an immense effect on the entire field of technology regulation.
A Historic Legal Shift: What the Ruling Changes
With its decision yesterday, the Supreme Court has put an end to the 1935 Humphrey’s Executor precedent. That was a landmark case in which commissioners of independent agencies were given protection against being removed by the president without cause. The matter came to the fore when President Biden last year saw fit to dismiss Rebecca Slaughter and another FTC commissioner without providing a reason.
The high court held that since those at the FTC are vested with executive power, it is the president’s prerogative to remove them as he sees fit. In doing so, the justices have changed the very makeup of independent agencies, institutions that have long been allowed to function with some measure of independence from the executive branch. Relying on a textualist and originalist reading of the Constitution, the court concluded that agency heads ought to be answerable to the president directly, even if that runs counter to the intent of shielding them from politics.
Implications for Crypto Regulation and Tech Policy
The Supreme Court’s decision is one that could carry deep implications for how cryptocurrencies and other new technologies are regulated, as was noted on Unchained. Agencies such as the SEC, CFTC, and FTC have been the driving force behind crypto policy to date. But given that the president can now quickly replace commissioners, a change in administration may well mean a hasty reordering of an agency’s agenda, with the risk of regulatory whiplash for the crypto sector.
There is no shortage of concern in the industry over the prospect of greater political sway at these agencies. The fear is that stability will be compromised. As different administrations put their own stamp on policy, the environment in which crypto firms and investors operate is likely to grow less predictable.
Concerns Over Agency Independence and Stability
The Unchained episode makes the case that backers of independent agencies have good reason to be concerned. In their view, this latest move erodes the very checks and balances put in place to keep regulatory bodies free from political influence. There is a sense that commissioners will be under more of an obligation to follow the president’s line, which can stifle dissent and put expertise on the back burner.
Then there are the critics who caution that such an expansion of power opens the door for future presidents to further their own partisan ends, not least in a fluid area like digital assets. The danger is one of instability; with each change of administration the regulatory landscape could be upended. That kind of uncertainty is no friend to the steady adoption and development of new technologies here in the U.S.
Source — Unchained: https://www.youtube.com/watch?v=wynLgZJ7i0o