US Supreme Court rules President has power to remove heads of independent regulatory agencies, adding uncertainty to SEC and CFTC crypto rulemaking process

BlockBeats news: On July 9, the U.S. Supreme Court ruled 6-3 in support of President Trump’s expansion of the power to remove leaders of independent federal agencies. The ruling has implications for the SEC and CFTC, which are currently moving forward with crypto regulatory rulemaking. Both agencies are designed to operate on a bipartisan basis, but the CFTC currently has only one commissioner—Chairman Michael Selig—while the SEC’s three commissioners are also all Republicans. A former agency official said the ruling is regrettable, arguing that fewer commissioners means less diversity of thought and debate, which may lead to suboptimal outcomes because fewer people are involved in discussions. Rules passed by bipartisan committees are usually more durable; without support from both parties, future opponents may more easily overturn them on the grounds that the rules were not fully debated.

From a legal perspective, a former CFTC official noted that as long as rulemaking complies with the Administrative Procedure Act, rules have full legal effect regardless of how many commissioners vote in favor. The advantage of a single-commissioner agency is faster decision-making, but the risk is that a lack of compromise may result in more errors. In addition, the financial disclosures of a Trump family crypto company show holdings of thousands of billions of dollars in Bitcoin and Ethereum. Tyler Gellasch, CEO of the Healthy Markets Association, said politics is cyclical: the stronger the tailwinds are today, the greater the likelihood that the industry will face a political hurricane in the future. Of note, if this ruling were applied under a future Democratic administration that opposes crypto, it could silence dissenting voices and weaken the ability of the public to hold accountability agencies to account. Congress is currently considering a landmark bill to allocate regulatory authority over digital assets between the SEC and CFTC, and lawmakers have urged Trump to appoint more CFTC commissioners to advance the legislative process.