Crypto Firms Face $400M in SEC Compliance Costs Amid Gensler’s Reforms

• The SEC’s enforcement actions have cost crypto firms $400 million since Gensler took office in 2021.
• A recent survey shows two-thirds of voters want the SEC to provide clearer crypto guidelines.
• GOP slightly favored over Democrats by voters to support digital asset innovation.

Since 2021, the U.S. crypto industry has faced over $400 million in compliance costs from actions taken by the Securities and Exchange Commission (SEC) under Chair Gary Gensler, according to a recent report from the Blockchain Association. 

This industry group, which includes major players like Coinbase, Ripple, and Kraken, shared that the regulatory body’s enforcement activities have driven significant legal and compliance expenses. 

Gensler, who took office in April 2021, has been a vocal proponent of treating most cryptocurrencies as securities, leading to a crackdown that has raised compliance hurdles across the sector.

The report, released with Harris, a research firm, compiled data on the financial impact of Gensler’s regulatory stance and surveyed 1,717 U.S. voters on their views toward the SEC’s approach to crypto regulation. 

The results show substantial public support for a more defined regulatory framework, with two-thirds of voters expressing a desire for the SEC to clarify its guidelines on crypto regulation.

Despite proposed bills addressing regulatory questions in the sector, especially concerning stablecoins, more legislation still needs to be passed to set clearer standards.

The financial strain on crypto firms has been significant. Coinbase, a leading U.S. crypto exchange, has been one of the most vocal critics, highlighting inconsistencies in the SEC’s regulatory approach. 

Coinbase’s Chief Legal Officer, Paul Grewal, recently commented on the economic toll of compliance, emphasizing the widespread impacts of these costs on businesses and taxpayers alike. Grewal has pointed out that the SEC’s actions impose unexpected financial burdens on companies and their stakeholders.

In addition to these financial challenges, the report mentions that Consensys, a major blockchain software firm, recently laid off 20% of its workforce, citing the regulatory landscape as a factor in its decision. 

Moreover, the SEC’s actions continue to escalate, as shown by the recent issuance of a Wells Notice to Immutable, a company involved in blockchain gaming. The SEC suggested that Immutable’s activities involving its IMX tokens may have violated securities laws, indicating that regulatory scrutiny will likely continue.