- Law professor J.W. Verrett said so
- In the podcast, he explained the concept of legal doctrine and how it affects the authority of the regulator
- The expert also noted that the outcome of the SEC case against Coinbase or Binance depends primarily on the judge
A new episode of “The Scoop” podcast featuring Professor J.W. Verrett aired yesterday, June 19. He previously served on an advisory committee to the Securities and Exchange Commission (SEC). Verret believes that the regulator has significantly overstepped its authority in recent lawsuits against Binance and Coinbase.
The full podcast recording can be listened to here. In his presentation, Verret covers the topic of legal doctrine. This is a provision from the work of experts and scholars that is used in litigation when there is a gap in the current law.</nbsp;
Verret compares two approaches – the so-called “loose ends” doctrine and the precedent of Chevron v. Natural Resources Defense Council. The latter is often used to compel respect for a federal regulator’s interpretation of an act.
The “loose ends” doctrine, in turn, requires the agency to follow certain “frameworks”. According to Verrett, this approach has gained popularity among conservative and libertarian judges.</nbsp;
These two doctrines can be described in two succinct terms:
- The Chevron case-the agency has the right to interpret a regulation in its own way;
- “free issues”-the regulator needs congressional approval to decide in a complex case that affects national interests.</nbsp;
And in the second case the scope of what the SEC allows is much narrower. Moreover, Gary Gensler stepped over them when he announced a personal “crusade” against the cryptocurrency segment.
Verret argues that the outcome of the proceedings against Coinbase and Binance depends primarily on the judge. Since there is no clear legislation in this area, he will be guided by the legal doctrine. But the depth of authority of the agency already depends on it.