A Mosaic Approach for Challenging SEC Crypto Regulation: The Major Questions Doctrine and Staff Accounting Bulletin 121


The regulatory scheme for the crypto industry can be described as uncertain, at best. The lack of regulatory clarity and agency over reliance on enforcement actions in the place of proper rulemaking will stifle the industry in U.S. markets. The SEC’s haphazard regulatory approach has created more questions and uncertainty. Staff Accounting Bulletin 121 (“SAB 121”) is a prime example of how the SEC’s desperate grasp for regulatory authority implicates the major questions doctrine and the Administrative Procedures Act. This Article analyzes current crypto litigation alongside SAB 121. It identifies a pattern of circumventing the Administrative Procedures Act and violations of the major questions doctrine in crypto actions taken by the SEC. This Article concludes that the current regulatory approach will likely cause irrevocable harm to the crypto industry and procedures under the Administrative Procedures Act. Judicial intervention is required, but piece-meal litigations pose a further risk to the industry. Courts should review and under-stand the entire regulatory scheme, not just the coin or regulation at issue, to fully appreciate the major questions doctrine and procedural implications posed by agencies in their rushed and ineffective approach at regulating the crypto industry.