Cryptocurrency stakeholders in the US continue to show discontent with the way the Securities and Exchange Commission (SEC) regulates and approaches the sector.
With the US presidential election due to take place tomorrow (5 November), the Blockchain Association, a trade body for the US blockchain and crypto industry, has reiterated its concerns about the direction the SEC has been taking.
Though not as significant in the minds of most Americans as issues like immigration, abortion, taxation and foreign affairs, crypto has become something of a political topic this year.
As the SEC Chair, along with four other senior positions, are chosen by the President, the opinions of whoever sits in the White House will have a lot of significance both for crypto and for the financial services and fintech sectors at large.
Gary Gensler, Chair of the SEC, has long found himself at odds with US crypto. In a recent statement, the Blockchain Association reiterated its call for new leadership at the SEC, taking aim at more than 100 enforcement actions the regulator has initiated under Gensler’s leadership.
Kristin Smith, CEO of the Blockchain Association, said: “The SEC’s regulation-by-enforcement approach is harming the US’s global tech leadership – and failing the American investor the SEC is mandated to protect.
“Our mission at Blockchain Association is steadfast. We will continue to fight on behalf of our members – in Washington, through legal action, and in the court of public opinion – to ensure the US becomes a place where the full potential of crypto and blockchain technology can be realised. That begins with a change of leadership at the SEC.”
Blockchain on the ballots
Crypto has become an increasingly contentious political issue in recent years, with the industry not entirely happy with how Joe Biden approached the sector. Biden’s replacement as Democratic Party Presidential nominee with Kamala Harris has not changed the picture too much.
Harris has shown a willingness to engage in discourse with the crypto sector, but the Biden administration’s legacy of vetoed legislation continues to stick with her. Though some key legislation, like FIT24, was not vetoed by the President, it did face continuing scepticism from the White House.
In contrast, Republican Party nominee and former President (2016-2020) Donald Trump has been actively courting crypto votes, and claims to have been receiving substantial campaign funds donated via Bitcoin.
At the Bitcoin 2024 conference earlier this year, the controversial businessman and politician stated that he wants to ‘ensure that the US will be the crypto capital of the planet and the Bitcoin superpower of the world’. He has made similar statements at the Libertarian National Convention and at various campaign stops throughout the year.
Crypto stakeholders have also been setting up Political Action Committees (PAC), organisations which pool campaign donations to support certain candidates. The Blockchain Association has one, whilst other notable organisations include Fairshake and Stand with Crypto.
Should Trump win the vote this week, Gensler and the SEC may find their jobs on the line as the Republican looks to satisfy the demands of his crypto supporters. If Harris succeeds, they can likely be more confident in retaining their positions and their desired regulatory direction.
It is also important to discuss what enforcement actions the SEC has actually been pursuing. Many of its actions relate to alleged fraudulent activity and money laundering, instances of insider trading and violations of securities laws.
Regardless, the Blockchain Association maintains that the industry has had to spend over £400m defending itself against an over-eager SEC, something which has led to ‘untold losses of jobs, innovation and US investment’.
Again, though crypto may not be front-and-centre for many Americans, it is clearly an issue that many have an opinion on – unsurprising given that up to one-fifth of Americans are estimated to hold cryptocurrency.
Blockchain Association polling asserts that two-thirds of US voters agree that the SEC should wait for ‘clearer guidelines from Congress’ in the form of digital asset legislation before embarking on its own policy direction around crypto.
Whether politicians like it or not, crypto will influence how a segment of the US voter base fills out its ballot tomorrow.
