In a revealing update from the Blockchain Association, a crypto industry group, firms have reported substantial financial burdens due to the actions of the U.S. Securities and Exchange Commission (SEC) under the leadership of Chair Gary Gensler. This data, compiled and released in cooperation with HarrisX, shows that since April 2021, when Gensler took office, the crypto industry has incurred $400 million in costs related to these regulatory actions.
US SEC Crackdown: Crypto Firms Report $400M in Compliance Costs Under Gary Gensler
According to a Blockchain Association report, the accumulated expenses resulting from US SEC enforcement have impacted the operations of major crypto firms. The association, which includes key industry players like Ripple, Coinbase, and Kraken, indicates that the costs stem primarily from legal defenses and compliance adjustments necessitated by the regulatory body actions.
Additionally, the report sheds light on the aggressive regulatory approach since Gary Gensler assumed the chairmanship. Gensler has been vocal about his stance that most cryptos qualify as securities and that the industry should align with traditional regulatory frameworks. This position has led to increased legal complexities for crypto enterprises.
Alongside the financial disclosures, the Blockchain Association and HarrisX conducted a national survey from October 25-28, polling 1,717 registered U.S. voters on their views toward US SEC enforcement in the crypto industry. The results indicated two-thirds expressed that the US SEC should provide clearer guidelines on crypto regulations. Although Congress has proposed bills addressing the industry and specific regulatory measures for stablecoins, these have yet to pass into law.
The survey also reveals a near-even split in party preference regarding which political party is more likely to support innovation in digital assets. For context, 34% favored the GOP and 32% favoring Democrats.
Industry Reactions and Ongoing Challenges
More so, the rigorous enforcement have prompted varied reactions across the crypto industry. Earlier in the month, Coinbase’s Chief Legal Officer, Paul Grewal, highlighted inconsistencies in the SEC’s legal positions. He criticized the lack of clear regulatory standards.
Following the recent financial report, the Coinbase’s Chief Legal Officer commented,
“These dollars are yours. Mine. All of ours. Think about that when you punch your clock. Think about that when you fill out your tax forms. And definitely think about that when you vote.”
Moreover, the regulatory body recently issued a Wells Notice to Immutable, signaling further enforcement actions. The regulatory body reportedly informed the firm that its IMX actions may have breached the law.
In parallel, Consensys had to reduce its workforce by 20% citing the SEC’s actions as a primary factor, underscoring the tangible impacts of regulatory challenges. These developments paint a complex picture of the crypto regulatory environment.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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