Blockchain Association Raises Concerns Over SEC’s Impact on Crypto Industry Costs

The Blockchain Association, a prominent advocate for blockchain and cryptocurrency, recently highlighted that enforcement actions by the US Securities and Exchange Commission (SEC) have cost the crypto industry an estimated $426 million in legal fees. This financial strain, according to the association, has escalated under SEC Chair Gary Gensler, who assumed his role in 2021.

SEC’s Intensified Actions Lead to Hefty Legal Expenses

On October 31, the Blockchain Association revealed the financial toll of the SEC’s enforcement, noting 104 legal actions against cryptocurrency companies between 2021 and 2023. The estimated $426 million is based on self-reported expenses from the association’s members, representing only part of the industry, suggesting that the actual cost may be significantly higher across the sector.

Critics argue that Gensler’s approach to regulation has created an uncertain landscape for crypto businesses. Industry leaders and some members of Congress warn that this “regulation by enforcement” may stifle innovation and push crypto businesses away from the US market. Kristin Smith, CEO of the Blockchain Association, has been vocal about the need for SEC leadership that supports fair regulation without discouraging technological advancement.

As the 2024 US presidential election approaches, cryptocurrency has become a focal issue for many voters. According to the Blockchain Association, “crypto voters” now comprise around 18% of the voting base, signaling a considerable interest in digital asset regulation among the electorate. Although neither major party has fully embraced the issue, Republican candidate Donald Trump has pledged to replace Gensler “on day one” if elected. Some Democratic leaders are also reportedly exploring a change in approach to cryptocurrency regulation.

The Blockchain Association urges crypto users to support candidates who favor innovation and regulatory clarity. With early voting already underway, this growing voter bloc could influence the election’s outcome, impacting future regulatory policy for the crypto industry.