Binance has “major questions.” Coinbase has “major questions.” Even President Joseph Biden had major questions. What exactly are these “major questions” that keep popping up across the crypto industry, and is it a “legal meme, ”like some people have suggested?
This article is part of CoinDesk’s State of Crypto Week, sponsored by Chainalysis.
To make short work of it, the so-called “major questions doctrine” is a recently established legal precedent that is meant to curb government overreach. In particular, it’s the administrative theory that Congress writes the rules that agencies like the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are meant to follow.
What that also means is that federal agencies are not supposed to wantonly assert “statutory authority” over uncertain domains — e.g. SEC Chair Gary Gensler stating “all of crypto” falls under his agency’s remit — without explicit permission. U.S. courts have the ability to determine when such agencies have overstepped.
In other words, “Congress makes the laws and [the SEC] follows their lead. Congress makes laws and [the SEC] interprets and enforces them,” as Ron Hammond, tktk of the Blockchain Association, said. The doctrine is less of a law, and more of a legal framework used to interpret the law.
Given that industry participants have been calling for a clear regulatory framework for years, it makes sense that “major questions” arise in the context of crypto. Binance’s U.S. affiliate, for instance, has evoked the doctrine in an attempt to quash an SEC lawsuit that claims the exchange sold unregistered securities.
“The SEC recently brought several enforcement actions – including this action – premised on its new position that virtually all crypto assets, and virtually all cryptoasset transactions, are securities,” a document filed in September reads.
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“Indeed, since 2019, Congress has considered more than a dozen proposals that would provide a coherent and workable framework for crypto assets and their trading platforms,” the filing said. “Critically, none of those proposals would confer sole regulatory jurisdiction over the crypto industry to the SEC,” it…
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