Under Gary Gensler, the SEC’s enforcement approach has reportedly cost crypto companies $426 million in legal defenses.
SEC’s Financial Toll on Crypto Industry
The Blockchain Association (BA), a blockchain advocacy organization, has reported significant costs to the crypto sector linked to the U.S. Securities and Exchange Commission’s (SEC) regulatory actions. The group claims that crypto companies have incurred at least $426 million in legal expenses since Gary Gensler became SEC chair.
SEC’s “Regulation by Enforcement” Policy
The Blockchain Association’s Oct. 31 update sheds light on how the SEC’s enforcement strategy has impacted the crypto industry. According to the report, the SEC filed 104 cases against various crypto firms from 2021 to 2023. The association noted that only a small portion of the crypto industry reported these expenses, implying that actual litigation costs across the sector may be even higher.
Industry Leaders Call for SEC Leadership Change
The Blockchain Association has called on crypto advocates to push for a change in SEC leadership. According to a statement from the BA, “The industry – and the American voter – is ready for change and a fair shot.” The group’s concerns reflect a growing sentiment that a more balanced approach is needed to foster innovation in the digital assets sector.
Impact of SEC’s Approach on Jobs and Investment
The BA criticized Gensler’s approach, claiming it has stifled job creation, tech innovation, and investment within the U.S. blockchain industry. “Gensler’s anti-innovation crypto crusade,” said the BA on X (formerly Twitter), has led to “an immeasurable loss of jobs, innovation, and US tech investment.” The association’s CEO, Kristin Smith, has also voiced her concerns, urging crypto enthusiasts to support leadership change.
Potential for Policy Change in the 2024 Elections
The Blockchain Association’s comments come as political candidates discuss SEC leadership options in the lead-up to the 2024 elections. While former President Donald Trump has vowed to replace Gensler if elected, reports indicate that Vice President Kamala Harris may also consider a new SEC chair if her administration wins.
The BA added that the crypto industry could play a crucial role in the election, given that it appeals to an estimated 18% of the electorate. The statement emphasized that “Crypto is an up-for-grabs election issue with the power to sway voters,” noting that both Democratic and Republican candidates have an opportunity to gain support by prioritizing innovation-friendly policies.
Election Day Nears as Crypto Stance Gains Focus
With early voting already underway, the issue of crypto regulation remains at the forefront for many voters. Although polls show Vice President Harris favored in the popular vote, the tight race in the Electoral College highlights the importance of each candidate’s stance on crypto issues. For many crypto advocates, Election Day on Nov. 5 could determine the future regulatory landscape for digital assets in the U.S.
Crypto’s Regulatory Landscape
As the election approaches, industry insiders hope for a more supportive approach to blockchain innovation. Many crypto advocates argue that a balanced SEC approach would support both innovation and investor protection. Regardless of the election outcome, the future leadership of the SEC will likely play a pivotal role in shaping the digital asset industry in the coming years.
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