Kraken’s top legal expert, Marco Santori, states that it’s time for regulators to step aside and let Congress handle the pivotal questions, as it’s clear that legislative progress on crypto is underway.
Despite the ongoing barrage of enforcement actions from the U.S. Securities and Exchange Commission (SEC) on the crypto space, Marco Santori, the chief legal officer for Kraken, suggests that a particular legal principle might curtail the regulator’s power. The prominent “major questions doctrine” – a critical aspect of U.S. administrative law implying that federal agencies should not preempt Congress on issues of significant economic value – has been leveraged by Coinbase (COIN) in its proactive defense against a looming SEC case. Santori believes this doctrine is particularly pertinent as Congress commences its work on cryptocurrency regulation.
“With Congress actively stepping into this arena, and with bipartisan representatives – two committees participating in an unprecedented joint hearing – these are clear signs of a ‘major question’ at play. It’s possible that a court may observe Congress’s actions and conclude that the regulatory body is overstepping its congressional mandate, indicating that this ‘major question’ should be addressed by Congress.”Santori asserted in a recent interview.
Santori, the head legal counsel for Kraken, which recently resolved a significant SEC allegation that its U.S. staking services constituted an unregistered securities offering, stated that both the SEC and its counterpart, the Commodity Futures Trading Commission (CFTC), need to consider this doctrine, rooted in U.S. Supreme Court decisions.
“Regulatory bodies must self-evaluate whether they’re dealing with a ‘major question’,”
Santori, who was a witness at this week’s joint hearing of the House Financial Services Committee and the House Agriculture Committee, said.
Santori expressed optimism that most members of Congress, regardless of party affiliation, believe that legislative action is necessary for cryptocurrency regulation. However, he acknowledged that the ambiguity surrounding the Senate’s perspective leaves room for speculation about its potential impact.