SEC Crackdown Costs Crypto Firms $426 Million: Gensler’s Compliance Mandate Hits Hard

Blockchain Association, a crypto-focused lobby group, announced that crypto companies have spent around $426 million fighting lawsuits filed by the US Securities and Exchange Commission (SEC) under its chief, Gary Gensler.

In its October 31st report, in partnership with HarrisX, the group criticized the agency for its “regulation by enforcement” approach, which impacts the whole crypto industry. In addition to the costs of fighting the complaints and cases, the Blockchain Association also noted the loss of jobs, which trickle down to the economy.

The Blockchain Association has partnered with HarrisX, a research and analytics company, to highlight the industry’s ongoing problems and issues. In the same press release, the group noted that the US agency has filed 104 cases against crypto companies from 2021 to 2023, while Gensler was the agency’s chairman.

Based on data reported by its members, they said expenses amounted to $426 million due to defensive litigation.

According to the group, it’s time for a change and to give cryptocurrency companies a fair shot. The group called Gensler’s approach a “law-fare,” a practice that must end. The group said that changing the agency’s leadership is the first step.

The press release also advocated for a change in leadership by motivating crypto voters to take action. Under Gensler’s watch, the agency has filed cases and inquiries against top blockchain companies such as Ripple, Binance, and Coinbase.

Aside from the loss of money, Gensler’s approach has been anti-innovation, which resulted in the loss of jobs and investments. In another Twitter/X post, the group’s CEO, Kristin Smith, encouraged digital currency users and developers to support the call for change in leadership. Her post did not specify or identify any names or political organizations that they would help in this election.

Gensler’s future has been a hot topic not just for crypto watchers but also for the US presidential candidates. Reports have it that he will get the boot once Donald Trump becomes the president. The Democrat Kamala Harris, on the other hand, will be looking for a possible replacement for the embattled head.

Blockchain Association says cryptocurrency is a crucial election issue that can sway voters. No party controls this issue, shared the group, and the candidate that supports innovation in digital assets will likely get the support of crypto voters.

According to estimates, 18% of the total voting population are crypto voters, and they can easily influence the results of the elections. The US elections are set for next Tuesday, but some states are having their early voting.

Featured image by Dall.E, chart from TradingView