1.01 - U.S. Constitution

Overview

There are a number of provisions of the U.S. Constitution applicable to cryptocurrency's formal legal status in the United States and to the scope of federal power over the digital asset industry. As explored below, the Constitution's monetary clauses (Article I, Sections 8 and 10) govern what can serve as "legal tender" and constrain state action in this area. But the constitutional landscape is far broader: the First, Fourth, Fifth, and Seventh Amendments, as well as structural principles of separation of powers, have all been implicated as the federal government has sought to regulate and enforce laws against cryptocurrency market participants, developers, and protocols.

It is important to keep these provisions in mind as calls to make any form of cryptocurrency "legal tender" grow in individual states. (The U.S. Constitution has no bearing on international adoption of cryptocurrency as legal tender. At least El Salvador has made bitcoin legal tender, and cryptocurrency regulation abroad is rapidly evolving. See Library of Congress, Regulation of Cryptocurrency Around the World (2021.11)).

Generally, the Constitution gives the federal government — specifically, Congress — the power to set a national currency and punish counterfeiting that currency. It also explicitly prohibits the states from coining their own money or permitting anything other than gold and silver to serve as payment of debts. This was an intentional rebuke to the many forms of paper currency circulating during the period of the Articles of Confederation. See, e.g., Ogden v. Saunders, 25 U.S. 213, 216 (1827) ("[T]he prohibition of issuing bills of credit, or making any thing but gold and silver coin a tender in the payment of debts, was intended to cut up paper money by the roots. The commercial credit of the nation had severely suffered from this fatal scourge; and the anxiety to be relieved from it, was one of the most pressing motives which induced the formation of the new constitution.").

Article I, Section 8, Clause 5

[The Congress shall have Power . . . ] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; . . . Constitution Annotated, Article I Section 8, Clause 5

By granting the Congress the power to "coin Money, [and] regulate the Value thereof," the Constitution gave Congress the supreme power to create a national currency. Thus, the Supreme Court has long interpreted this clause as empowering Congress "to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals." Juilliard v. Greenman, 110 U.S. 421, 448 (1884); see also Knox v. Lee (The Legal Tender Cases), 79 U.S. 457, 545 (1870) ("The Constitution was intended to frame a government as distinguished from a league or compact, a government supreme in some particulars over States and people. It was designed to provide the same currency, having a uniform legal value in all the States. It was for this reason the power to coin money and regulate its value was conferred upon the Federal government, while the same power as well as the power to emit bills of credit was withdrawn from the States. The States can no longer declare what shall be money, or regulate its value. Whatever power there is over the currency is vested in Congress.") (emphasis added).

The Constitution further clarifies (per Section 10, Clause 1, below) that the states do not have the same power. Accordingly, only the federal government has the sole power to create legal tender and set monetary policy around it. Thus, if any cryptocurrency is to gain status as legal tender in the United States, it must be established as such by Congress.

Central Bank Digital Currency (CBDC)

The question of whether the federal government should issue a digital form of the U.S. dollar — a Central Bank Digital Currency ("CBDC") — has undergone a dramatic policy reversal. In March 2022, President Biden issued Executive Order 14067 directing numerous federal agencies to study and evaluate a potential CBDC, and the Federal Reserve published a discussion paper examining its potential benefits and risks. See Federal Reserve Board, Money and Payments: The U.S. Dollar in the Age of Digital Transformation (2022.01.20).

The political landscape shifted decisively after the 2024 election. On January 23, 2025, President Trump signed Executive Order 14178, Strengthening American Leadership in Digital Financial Technology, which revoked Biden's Executive Order 14067 and expressly prohibited federal agencies from undertaking "any action to establish, issue, or promote CBDCs within the jurisdiction of the United States." The order articulated a policy preference for private-sector stablecoins over government-issued digital currency, and separately established a Presidential Working Group on Digital Asset Markets.

Congress moved in the same direction. In May 2024, the House of Representatives passed the CBDC Anti-Surveillance State Act (H.R. 5403), which would prohibit the Federal Reserve from issuing a CBDC — either directly to individuals or indirectly through financial intermediaries — absent explicit congressional authorization. The bill's proponents framed the prohibition in constitutional terms, arguing that a government-issued programmable digital currency could enable financial surveillance incompatible with the Fourth Amendment. Federal Reserve Chair Jerome Powell separately testified that he would not propose or pursue a digital dollar during the balance of his tenure (expiring in spring 2026).

The net result is a clear federal policy choice: rather than exercise Congress's Article I, Section 8 monetary power to create a government-issued digital currency, the United States has opted to strengthen dollar hegemony through private-sector stablecoins, as codified in the GENIUS Act (enacted July 17, 2025), which established the first national regulatory framework for fiat-backed stablecoins. See also Treasury.

Strategic Bitcoin Reserve

On March 6, 2025, President Trump issued a separate Executive Order, Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile, establishing offices within the Department of the Treasury to administer and maintain custody of bitcoin and other digital assets forfeited through criminal or civil proceedings. Unlike a CBDC — which would represent a new form of legal tender — the Strategic Bitcoin Reserve treats bitcoin as a reserve asset akin to gold, to be held but not issued as currency. The executive order does not confer legal tender status on bitcoin, and its constitutional authority derives from the President's executive powers rather than the monetary clause.

Article I, Section 10, Clause 1

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility. Constitution Annotated, Article I Section 10

Although some states have contemplated making some cryptocurrencies (usually bitcoin) "legal tender" in their jurisdictions, the Constitution expressly prohibits them from doing so in this section. See, e.g., Brandy Betz, State Senator Introduces Bill to Make Bitcoin Legal Tender in Arizona (2022.01.28); Leon Siegmund, New bill could make bitcoin legal tender in California (2022.02.20).

As the Supreme Court early concluded, "[t]he whole control, therefore, over the standard of value, and medium of payments, is vested in the general government." Ogden v. Saunders, 25 U.S. 213, 248 (1827). Indeed, as the Court explained, the policy set forth in the Constitution was "to provide a fixed and uniform standard of value throughout the United States, by which the commercial and other dealings between the citizens thereof, or between them and foreigners, as well as the monied transactions of the government, should be regulated." Id. at 265. Scholarly debate continues, however, about the extent to which at least bitcoin ought to be considered legal tender. See W. Aaron Daniel, The Constitutional Argument for State Adoption of Bitcoin as Legal Tender (Part I of IV) (2022.03.28).

Despite states not being able to take the (symbolic) move of classifying a given cryptocurrency as legal tender, it remains to be seen what action the federal government would take if states started, for example, accepting bitcoin as valid payment for taxes or public contracts, i.e., as "tender in payment of debts."

Nothing in the Constitution, however, prevents private businesses or individuals from accepting cryptocurrency as payment for goods or services. States simply cannot obligate them to accept cryptocurrency for payment of debts, which would be the effect of declaring a given cryptocurrency "legal tender" in a state.

State Bitcoin Reserves and the Legal Tender Distinction

Beginning in 2024 and accelerating in 2025, a wave of state legislatures introduced bills seeking to establish "Strategic Bitcoin Reserves," through which state treasurers or pension funds could hold bitcoin as a reserve asset. Arizona and New Hampshire enacted Bitcoin reserve laws in May 2025, and Texas signed its reserve measure in June 2025. Numerous other states — including Montana, North Dakota, Pennsylvania, South Dakota, and Wyoming — considered but did not advance comparable bills during 2025 legislative sessions.

These reserve bills are constitutionally distinguishable from the earlier "legal tender" proposals. Rather than declaring bitcoin to be legal tender (which would violate Article I, Section 10), the reserve bills treat bitcoin as a financial asset to be held by the state — more akin to a state investing in gold or other commodities. Oklahoma's Senate Bill 2064, introduced in the 2026 legislative session, illustrates this careful constitutional line-drawing: it establishes a framework for accepting bitcoin as a medium of exchange for state employee compensation and vendor payments, but explicitly states that it does not designate bitcoin as legal tender and does not conflict with the U.S. Constitution's prohibition on states coining money or making anything other than gold and silver a tender in payment of debts. See Oklahoma SB 2064, Bitcoin Financial Instrument Act (introduced 2026).

The distinction between "legal tender" and "reserve asset" or "permitted medium of exchange" will likely remain a critical constitutional boundary as more states seek to integrate bitcoin into public finance without running afoul of Article I, Section 10.

First Amendment

Code as Speech

The question of whether writing and publishing computer code — including smart contract code deployed to blockchains — constitutes speech protected by the First Amendment has emerged as one of the most significant constitutional issues in cryptocurrency law. The issue has roots predating cryptocurrency. See Bernstein v. U.S. Dep't of Justice, 176 F.3d 1132, 1141 (9th Cir. 1999) ("[C]omputer language is . . . a means for humans to communicate with and direct computers."); Universal City Studios, Inc. v. Corley, 273 F.3d 429, 449 (2d Cir. 2001) (recognizing that code has both an "expressive" and a "functional, non-speech component"). The issue crystallized beginning in 2022 through a series of civil and criminal proceedings arising from cryptocurrency privacy tools.

OFAC Tornado Cash Sanctions and Legal Challenges

In August 2022, OFAC sanctioned Tornado Cash, a decentralized mixer protocol on the Ethereum blockchain designed to provide transaction privacy by obscuring the link between senders and receivers. OFAC alleged Tornado Cash had been used to launder more than $7 billion in virtual currency, including $455 million stolen by the North Korean-affiliated Lazarus Group. See OFAC, Press Release, U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash (2022.08.08). (For a full discussion of the OFAC sanctions and their implications, see OFAC.)

The sanctions sparked two major legal challenges raising constitutional concerns:

Van Loon v. Department of the Treasury. Six plaintiffs filed suit in the Western District of Texas challenging the sanctions under the Administrative Procedure Act and raising First Amendment concerns. The district court granted summary judgment to the Treasury, but on November 26, 2024, the Fifth Circuit reversed. See Van Loon v. Dep't of the Treasury, No. 23-50669 (5th Cir. 2024). The Fifth Circuit held that OFAC exceeded its statutory authority under IEEPA because immutable smart contracts are not "property" within the meaning of the statute. The court reasoned that "property" must be "capable of being owned," and that immutable smart contracts — self-executing code that cannot be altered or controlled by anyone, including their creators — do not meet this criterion. Id. The court further found that immutable smart contracts are neither "contracts of any nature" (because they involve "a unilateral offer by a user to an autonomous computer code" rather than an agreement between parties) nor "services" (because a service requires "human effort"). Id.

Notably, the Fifth Circuit cited the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024) (discussed below), in declining to defer to OFAC's interpretation, holding that courts must determine the "best" reading of a statute, not merely a "permissible" one. Id.

Following the Fifth Circuit's ruling, OFAC delisted Tornado Cash from the SDN List on March 21, 2025, stating it had "exercised our discretion to remove the economic sanctions." OFAC, Press Release, Tornado Cash Delisting (2025.03.21).

Coin Center v. Department of the Treasury. The crypto policy nonprofit Coin Center filed a parallel challenge in the Northern District of Florida in October 2022, alleging that Treasury exceeded its statutory authority and that the sanctions violated plaintiffs' First Amendment and due process rights. See Coin Center, Coin Center is suing OFAC over its Tornado Cash sanction (2022.10.12). The district court granted summary judgment to the Treasury. Following OFAC's delisting of Tornado Cash, the parties jointly moved for the Eleventh Circuit to vacate the lower court ruling and remand with instructions to dismiss as moot. The Eleventh Circuit granted the motion on July 3, 2025. Peter Van Valkenburgh, Coin Center's executive director, noted the government had "decided not to defend its broad interpretation of sanctions laws in court." See CoinDesk, TORN Spikes 5% After U.S. Appeals Court Okays End of Another Tornado Cash Lawsuit (2025.07.07).

Although Van Loon was decided on statutory rather than constitutional grounds, the First Amendment questions raised by sanctioning autonomous code remain unresolved and may arise again in future cases involving decentralized protocols.

United States v. Roman Storm

Separate from the civil sanctions challenges, the DOJ arrested Tornado Cash co-founder Roman Storm in August 2023, charging him with conspiracy to commit money laundering, conspiracy to violate sanctions, and conspiracy to operate an unlicensed money transmitting business. See DOJ, Press Release, Founders And CEO Of Cryptocurrency Mixing Service Arrested And Charged With Money Laundering And Unlicensed Money Transmitting Offenses (2023.08.23).

Storm's defense raised First Amendment arguments, contending that prosecuting developers for writing and publishing code amounts to punishing protected speech. In a pre-trial ruling, Judge Katherine Polk Failla of the Southern District of New York rejected the First Amendment defense, holding that "[t]he functional capability of code is not speech within the meaning of the First Amendment." See United States v. Storm, No. 23-cr-430, at *37–38 (S.D.N.Y. 2024.09.26). Judge Failla further barred both sides from raising First Amendment issues before the jury.

On August 6, 2025, the jury delivered a mixed verdict, convicting Storm on one count of conspiracy to operate an unlicensed money transmitting business (carrying a maximum sentence of five years), while deadlocking on the more serious charges of conspiracy to commit money laundering and conspiracy to violate sanctions. See DOJ, Press Release, Founder of Tornado Cash Crypto Mixing Service Convicted of Knowingly Transmitting Criminal Proceeds (2025.08.06). Storm's attorneys subsequently filed a motion for acquittal, again arguing that the statutes applied cannot withstand First Amendment scrutiny when used to criminalize the publication of decentralized software. The motion remains pending as of this writing.

Judge Failla's ruling that code's "functional capability" strips it of First Amendment protection stands in tension with the Ninth Circuit's recognition in Bernstein that code is an expressive medium. Whether this issue reaches the appellate courts — and how they reconcile the expressive and functional dimensions of code — may prove to be one of the defining constitutional questions of the next decade.

Samourai Wallet

The constitutional tension between code and criminal conduct also arose in the prosecution of Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill, arrested in April 2024 for conspiracy to commit money laundering and operating an unlicensed money transmitting business in connection with a privacy-focused Bitcoin mixing service. See DOJ, Press Release, Founders And CEO Of Cryptocurrency Mixing Service Arrested And Charged With Money Laundering And Unlicensed Money Transmitting Offenses (2024.04.24). The service had allegedly facilitated over $2 billion in Bitcoin transactions, with approximately $237 million in criminal proceeds. Both defendants ultimately pleaded guilty and were sentenced (Rodriguez to five years, Hill to four). See DOJ, Press Release, Founders Of Samourai Wallet Cryptocurrency Mixing Service Sentenced To Five And Four Years In Prison (2025.11).

The prosecution raised due process concerns regarding fair notice. FinCEN reportedly confirmed during the proceedings that CoinJoin transactions and non-custodial wallets do not constitute "money transmission" — yet the criminal charges proceeded under money transmission statutes nonetheless. This divergence between FinCEN's regulatory position and the DOJ's prosecutorial theory highlights unresolved questions about the scope of developer liability for privacy-preserving code and whether defendants received constitutionally adequate notice of which conduct was prohibited.

Fourth Amendment

Blockchain Surveillance and the Third-Party Doctrine

The Fourth Amendment's protection against unreasonable searches and seizures raises important questions in the cryptocurrency context: Does the government need a warrant to analyze public blockchain transactions? What about obtaining customer records from cryptocurrency exchanges? Courts have generally held that existing Fourth Amendment doctrines — particularly the third-party doctrine — apply to cryptocurrency in much the same way they apply to traditional financial records, although this area remains under active development.

United States v. Gratkowski

In the first appellate decision addressing Fourth Amendment privacy interests in virtual currency transactions, the Fifth Circuit held that the government's warrantless analysis of Bitcoin blockchain data and its subpoena to Coinbase for customer records did not violate the defendant's Fourth Amendment rights. See United States v. Gratkowski, 964 F.3d 307 (5th Cir. 2020). The court concluded that "the information on Bitcoin's blockchain is far more analogous to the bank records in Miller and the telephone call logs in Smith than the CSLI in Carpenter." Id. at 312.

The court thus applied the third-party doctrine from Smith v. Maryland, 442 U.S. 735 (1979), and United States v. Miller, 425 U.S. 435 (1976), holding that users who voluntarily transmit information to cryptocurrency exchanges — like depositors at a bank — cannot claim a reasonable expectation of privacy in those records. The court distinguished Carpenter v. United States, 585 U.S. 296 (2018), reasoning that Bitcoin "is not central to most people's daily lives" in the way cell phones are, and thus the transaction records do not reveal the same "intimate details of a person's life." Gratkowski, 964 F.3d at 312.

Commentators have criticized this reasoning, noting that as cryptocurrency becomes more widely adopted and blockchain analytics tools become more sophisticated, the analogy to simple bank records may prove inadequate. See Columbia Business Law Review, The Privacy Limits of Transacting in Bitcoin: The Fifth Circuit's Flawed Reasoning in United States v. Gratkowski (2021).

Harper v. Werfel (IRS John Doe Summonses)

The constitutional issues surrounding government access to cryptocurrency records were further tested in challenges to IRS "John Doe" summonses issued to major exchanges. The IRS issued broad summonses to Coinbase (2016), Kraken (2021), and other exchanges seeking records of customers who may have underreported crypto-related income. Individual taxpayers challenged these summonses under the Fourth Amendment, arguing they constituted unreasonable searches.

In Harper v. Werfel, the District of New Hampshire dismissed the challenge, holding that the taxpayer had neither a reasonable expectation of privacy nor a property interest in Coinbase's records pertaining to his account. The First Circuit affirmed in September 2024, again applying the third-party doctrine. See Harper v. Werfel, No. 23-1908 (1st Cir. 2024). The Supreme Court denied certiorari in 2025, leaving the rule undisturbed.

The denial of certiorari leaves a clear — if criticized — rule: cryptocurrency exchange users have no Fourth Amendment right to prevent the IRS from obtaining their account records through judicially-authorized John Doe summonses. Whether this analysis would extend to non-custodial wallets or privacy-preserving protocols — where there is no intermediary holding user records — remains an open question with potentially different Fourth Amendment implications, since the third-party doctrine may not apply where no third party receives user data.

Fifth Amendment

Due Process and Fair Notice

The Due Process Clause of the Fifth Amendment requires that individuals have "fair notice" of which actions are prohibited by law. Several cryptocurrency defendants have invoked this principle against the SEC, arguing that in the absence of clear crypto-specific regulations, they lacked constitutionally adequate notice that their conduct violated the securities laws.

SEC v. LBRY, Inc.

In November 2022, the District of New Hampshire rejected LBRY's fair notice defense. LBRY argued the SEC had deprived it of due process by failing to provide fair notice that its LBC token was a security, noting this was the first enforcement action the SEC had brought against a digital asset token that was not issued through an initial coin offering (ICO). LBRY contended that the SEC's enforcement action constituted a "substantial change in its enforcement policy" such that LBRY lacked fair notice the securities laws might apply to its offering. The court held that the Howey test, established by the Supreme Court in 1946, provides sufficient clarity, and that a person of ordinary intelligence would have fair notice that LBRY's token offering constituted an investment contract — regardless of whether the SEC had previously brought an action under identical circumstances. See SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. 2022.11.07). A civil penalty of $111,614 was imposed in July 2023.

SEC v. Ripple Labs, Inc.

In its landmark July 2023 decision, Judge Analisa Torres of the Southern District of New York addressed Ripple's fair notice defense. The court held that the Howey test "sets forth a clear test" for determining what constitutes an investment contract, and that its "progeny provides guidance on how to apply that test to a variety of factual scenarios." See SEC v. Ripple Labs, Inc., No. 20-cv-10832, at *28 (S.D.N.Y. 2023.07.13). The court thus rejected the fair notice defense as to Ripple's institutional sales, finding the SEC's enforcement approach in that context was "consistent" with existing law.

However, the court's separate finding that programmatic sales to retail purchasers on exchanges did not constitute securities transactions left open the possibility that fair notice concerns may be more compelling for certain types of crypto transactions — particularly those where the link between buyer and promoter is attenuated. The case was resolved in August 2025 when the SEC and Ripple filed a joint stipulation of dismissal, vacating the appeal. See SEC Litigation Release No. 26369 (2025.08).

CFTC v. Ooki DAO

In the first federal enforcement action against a decentralized autonomous organization, the CFTC filed charges against Ooki DAO in September 2022 for operating an off-exchange digital asset trading protocol in violation of the Commodity Exchange Act. See CFTC, Press Release, CFTC Imposes $250,000 Penalty Against bZeroX, LLC and Its Founders and Charges Successor Ooki DAO for Offering Illegal, Off-Exchange Digital-Asset Trading, Registration Violations, and Failing to Comply with Bank Secrecy Act (2022.09.22). The case raised novel due process questions about how a federal agency can serve process on a DAO — an entity with no centralized management, no registered agent, and no physical address.

Amici including advocates for the DeFi industry argued the CFTC's method of serving process — by posting notice in the DAO's online governance forum and through its website chatbot — did not comport with constitutional requirements of notice and the opportunity to be heard. The District Court for the Northern District of California rejected these arguments and entered a default judgment against Ooki DAO on June 8, 2023, holding that the CFTC's service method satisfied due process. See CFTC v. Ooki DAO, No. 3:22-cv-5416 (N.D. Cal. 2023.06.08). The case established the precedent that a DAO can be treated as an unincorporated association subject to federal enforcement — and served through its digital communication channels — but the due process implications for truly decentralized DAOs that lack any centralized governance remain unresolved.

Seventh Amendment

Right to Jury Trial in SEC Administrative Proceedings

On June 27, 2024, the Supreme Court issued a landmark decision in SEC v. Jarkesy, 144 S. Ct. 2117 (2024), holding that the Seventh Amendment right to a jury trial applies when the SEC seeks civil penalties for securities fraud through its in-house administrative proceedings. The Court reasoned that civil penalties are a "punitive form of monetary relief" traditionally awarded by courts of law, and that securities fraud "resembles common law fraud" — a claim historically tried before a jury. Id.

Although Jarkesy did not involve cryptocurrency, its implications for digital asset enforcement are significant. Between 2013 and early 2024, the SEC brought numerous enforcement actions involving digital assets through administrative proceedings before its own administrative law judges ("ALJs"). Under Jarkesy, the SEC can no longer seek civil penalties in these proceedings; such claims must instead be brought in Article III federal courts before a jury. See DeFi Education Fund, SCOTUS Goes After the Admin State: What it Means for Crypto (2024.07). For the digital asset industry, which had long objected to what it perceived as a hostile "home court" in SEC administrative proceedings, the ruling represents a meaningful structural change in how future enforcement actions must be pursued.

Separation of Powers

Two landmark 2024 Supreme Court decisions — neither of which involved cryptocurrency directly — have fundamentally reshaped the constitutional framework within which federal crypto regulation operates.

The Major Questions Doctrine

In West Virginia v. EPA, 597 U.S. 697 (2022), the Supreme Court held that when a federal agency asserts authority over an issue of "vast economic and political significance," it must point to "clear congressional authorization" for that power. This "major questions doctrine" has been invoked by cryptocurrency defendants arguing that neither the SEC nor the CFTC has clear congressional authority to regulate the digital asset industry — a multi-trillion-dollar market — through enforcement actions brought under statutes enacted decades before the invention of cryptocurrency.

The argument was raised most prominently in SEC v. Coinbase, Inc., No. 23-cv-4738 (S.D.N.Y. 2024.03.27), where Coinbase argued the SEC's attempt to regulate the entire cryptocurrency industry as unregistered securities triggered the doctrine. Judge Katherine Polk Failla rejected the argument, holding that "while certainly sizable and important, the cryptocurrency industry cannot compare with those other industries the Supreme Court has found to trigger the major questions doctrine," and that the SEC was "exercising its Congressionally bestowed enforcement authority to regulate virtually any instrument that might be sold as an investment." Id. The SEC dismissed the case in February 2025 before an interlocutory appeal could be heard. See SEC, Press Release, SEC Announces Dismissal of Civil Enforcement Action Against Coinbase (2025.02).

Several other defendants — including Binance and Ripple — raised major questions arguments in their SEC litigation, but none obtained a favorable ruling on the issue before those cases were dismissed or settled as part of the broader shift in SEC enforcement policy under Chairman Paul Atkins. See SEC. Scholarly debate continues over whether the SEC's case-by-case approach through existing Howey precedent is sufficient to avoid triggering the major questions doctrine, or whether the sheer scale of the industry and the novelty of the technology demands explicit congressional authorization. See Fordham Law Review, Ripple Effect: The SEC's Major Questions Doctrine Problem (2023); but see CLS Blue Sky Blog, Why the Major Questions Doctrine Does Not Cover SEC Crypto Lawsuits (2023.09.14).

End of Chevron Deference

On June 28, 2024, the Supreme Court overruled the longstanding Chevron framework in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), holding that federal courts may not defer to an agency's interpretation of an ambiguous statute merely because the statute is ambiguous. Under the Administrative Procedure Act, courts must instead "exercise their independent judgment" in determining whether an agency has acted within its statutory authority. Id.

The implications for cryptocurrency regulation are substantial. Much of federal crypto regulation has consisted of agencies like the SEC and CFTC applying broad, decades-old statutes to novel technology through enforcement actions — precisely the type of agency interpretation that Loper Bright makes more vulnerable to judicial challenge. As one commentator observed, "[i]n cases such as the regulation of cryptocurrencies, where there are very few laws, and there are even very few agency interpretations — in those fields, there has been a power shift from the agencies to the courts." See Foley & Lardner, The End of Chevron Deference and the Implications for the SEC (2024.07).

The impact of Loper Bright was immediately apparent in the cryptocurrency space. In Van Loon v. Department of the Treasury (discussed above), the Fifth Circuit explicitly cited Loper Bright in declining to defer to OFAC's interpretation of "property" under IEEPA, requiring instead the "best" reading of the statute. That reading — holding that immutable smart contracts are not "property" — led to the reversal of the Tornado Cash sanctions and a significant limitation on OFAC's ability to sanction autonomous, decentralized software protocols.

Index of Sources

Sources are listed in reverse chronological order.

• DOJ, Press Release, Founders Of Samourai Wallet Cryptocurrency Mixing Service Sentenced To Five And Four Years In Prison (2025.11)

• DOJ, Press Release, Founder of Tornado Cash Crypto Mixing Service Convicted of Knowingly Transmitting Criminal Proceeds (2025.08.06)

• SEC Litigation Release No. 26369 (SEC v. Ripple Labs dismissed) (2025.08)

• CoinDesk, TORN Spikes 5% After U.S. Appeals Court Okays End of Another Tornado Cash Lawsuit (2025.07.07) (Coin Center v. Treasury dismissed as moot)

• OFAC, Press Release, Tornado Cash Delisting (2025.03.21)

• Executive Order, Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile (2025.03.06)

• SEC, Press Release, SEC Announces Dismissal of Civil Enforcement Action Against Coinbase (2025.02)

• Executive Order 14178, Strengthening American Leadership in Digital Financial Technology (2025.01.23)

• Van Loon v. Dep't of the Treasury, No. 23-50669 (5th Cir. 2024.11.26)

• United States v. Storm, No. 23-cr-430 (S.D.N.Y. 2024.09.26) (pre-trial ruling rejecting First Amendment defense)

• Harper v. Werfel, No. 23-1908 (1st Cir. 2024)

• DeFi Education Fund, Redefining Boundaries in Administrative Law: How the Loper Bright Decision Could Reshape Crypto Regulation (2024)

• DeFi Education Fund, SCOTUS Goes After the Admin State: What it Means for Crypto (2024.07)

• Foley & Lardner, The End of Chevron Deference and the Implications for the SEC (2024.07)

• Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024)

• SEC v. Jarkesy, 144 S. Ct. 2117 (2024)

• DOJ, Press Release, Founders And CEO Of Cryptocurrency Mixing Service Arrested And Charged With Money Laundering And Unlicensed Money Transmitting Offenses (2024.04.24) (Samourai Wallet)

• SEC v. Coinbase, Inc., No. 23-cv-4738 (S.D.N.Y. 2024.03.27) (major questions ruling)

• CLS Blue Sky Blog, Why the Major Questions Doctrine Does Not Cover SEC Crypto Lawsuits (2023.09.14)

• DOJ, Press Release, Founders And CEO Of Cryptocurrency Mixing Service Arrested And Charged With Money Laundering And Unlicensed Money Transmitting Offenses (2023.08.23) (Roman Storm)

• SEC v. Ripple Labs, Inc., No. 20-cv-10832 (S.D.N.Y. 2023.07.13) (fair notice ruling)

• CFTC v. Ooki DAO, No. 3:22-cv-5416 (N.D. Cal. 2023.06.08)

• Fordham Law Review, Ripple Effect: The SEC's Major Questions Doctrine Problem (2023)

• Coin Center, Coin Center is suing OFAC over its Tornado Cash sanction (2022.10.12)

• SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. 2022.11.07)

• CFTC, Press Release, CFTC Imposes $250,000 Penalty Against bZeroX, LLC and Its Founders and Charges Successor Ooki DAO (2022.09.22)

• OFAC, Press Release, U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash (2022.08.08)

• West Virginia v. EPA, 597 U.S. 697 (2022)

• Executive Order 14067 (2022.03.09)

• W. Aaron Daniel, The Constitutional Argument for State Adoption of Bitcoin as Legal Tender (Part I of IV) (2022.03.28)

• Leon Siegmund, New bill could make bitcoin legal tender in California (2022.02.20)

• Federal Reserve Board, Money and Payments: The U.S. Dollar in the Age of Digital Transformation (2022.01.20)

• Brandy Betz, State Senator Introduces Bill to Make Bitcoin Legal Tender in Arizona (2022.01.28)

• Columbia Business Law Review, The Privacy Limits of Transacting in Bitcoin: The Fifth Circuit's Flawed Reasoning in United States v. Gratkowski (2021)

• Library of Congress, Regulation of Cryptocurrency Around the World (2021.11)

• United States v. Gratkowski, 964 F.3d 307 (5th Cir. 2020)

• Bernstein v. U.S. Dep't of Justice, 176 F.3d 1132 (9th Cir. 1999)

• Juilliard v. Greenman, 110 U.S. 421, 448 (1884)

• Knox v. Lee (The Legal Tender Cases), 79 U.S. 457, 545 (1870)

• Ogden v. Saunders, 25 U.S. 213, 216 (1827)

• Constitution Annotated, Article I Section 10

• Constitution Annotated, Article I Section 8, Clause 5

Authors

This article was originally drafted by @Lawtoshi and is subsequently being updated in conjunction with Claude Code.