JPMorgan Sounds Warning: Agency Rules May Not Be Crypto's Saviors

The U.S. Senate's failure to pass the CLARITY Act has left the cryptocurrency industry searching for alternatives, but a recent warning from JPMorgan suggests that relying on agency rules may not be as stable as initially thought.

In the aftermath of the September 15 vote, several prominent figures in the crypto space pointed to agency rulemaking as a potential backup plan. However, JPMorgan took a more cautious approach, warning clients that agency rules are 'less durable than legislation' and can be changed or challenged in court.

This divergence in opinion highlights the ongoing uncertainty surrounding regulatory clarity in the cryptocurrency market. Bernstein remains bullish on rulemaking under the current SEC, but acknowledges that the CLARITY Act's failure removes a crucial 'fool-proof shield for the industry against future political shifts.'

The Ripple case against the SEC serves as a prime example of the risks associated with relying on regulatory action outside legislation. While the district court's judgment in favor of XRP created an important legal distinction, it took years of litigation to reach that point.