Gensler Senate Appropriations hearing
The SEC under Gary Gensler has faced immense criticism over its enforcement-first approach toward regulating crypto, and it turns out American voters are increasingly getting concerned about the matter. U.S. Senate Website/Screenshot

KEY POINTS

  • 81% of U.S. voters want the government to provide more education on digital assets
  • 61% of registered American voters believe 'SEC actions are inconsistently applied'
  • More voters believe SEC enforcement contributed to the decline in U.S.-based talent
  • Voters are more likely to support candidates advocating for crypto innovation

A new poll by HarrisX Public Policy Research Team and the Blockchain Association has unveiled how voters in the United States view the U.S. Securities and Exchange Commission's (SEC) regulatory approach toward the cryptocurrency industry, and the results are critical in the lead-up to the elections.

HarrisX conducted the poll from Oct. 25-28 among 1,717 registered voters.

It claims that more Americans believe financial regulators should focus on clear guidelines over enforcement.

HarrisX BA poll SEC enforcement
Most registered voters believe regulators should focus on providing clear rules for crypto investment instead of enforcing existing regulations. Blockchain Association / Screenshot

More Voters Demand Increased Digital Asset Education

Even as cryptocurrency has been in the financial realm for more than a decade, mass knowledge about blockchain technology and digital assets remains an issue.

The poll revealed a "strong demand for increased transparency and education regarding digital assets." 81% of the respondents said the government should provide more resources for education on the risks and benefits of digital assets.

Two-Thirds of American Voters Want Congress Guidance Before SEC Action

At a time when the crypto industry continues to be haunted by lawsuits and Wells notices from the SEC led by Chair Gary Gensler, the poll revealed that "two-thirds of voters," or 66% of the respondents, agree that the regulatory agency "should wait until Congress provides clearer guidelines" before it implements enforcement actions.

Furthermore, the majority of registered voters (61%) believed that "SEC actions are inconsistently applied."

HarrisX BA poll Congress
Most US voters agree that enforcement actions are necessary to protect investors, but majority also agree that the SEC should wait for Congress to provide clearer regulations before any enforcement actions are implemented. Blockchain Association / Screenshot

Congress has yet to pass a crypto-focused bill. There has been progress with some proposed legislation to provide the sector with a regulatory framework but it is unclear if crypto-centric bills will pass.

Crypto users and somed lawmakers have criticized Gensler for what they claim is a "destructive" crusade against firms in the blockchain and crypto sector.

Democratic Rep. Ritchie Torres recently highlighted Gensler's inconsistent explanations on cryptocurrencies being securities.

An Increasing Number of Voters Believe SEC Actions Affect Talent

The survey also found an increasing number of people believe the SEC's enforcement actions have played a role in blockchain developers moving out of the country.

HarrisX BA poll developer impact
A growing number of American voters believe the SEC's enforcement actions contributed to the move of U.S.-based blockchain developers offshore. Blockchain Association / Screenshot

54% of the respondents believed the SEC's crypto war is "contributing to the decline in blockchain development and innovation within the U.S," compared to 46% who believed the decline is driven by a broader shift among developers toward other markets.

In a recent Congressional hearing, a former SEC official said the regulators missed an opportunity to help the U.S. maintain edge in the crypto sector due to its "whack-a-mole enforcement" approach. The former official called the country a "crypto no fly zone."

Voters More Likely to Support Digital Asset Innovation Advocates

Finally, the HarrisX poll found that there is an opportunity for pro-crypto candidates to win over American voters over the issue on SEC regulation and enforcement.

"On net, voters are +17 points more likely to support a candidate who promotes innovation in digital assets (29% more likely vs 12% less likely). Similarly, voters are on net +15 points more likely to say they will vote for a candidate who supports digital asset development (30% more likely vs 15% less likely)," as per the survey results.

Crypto voters, who make up for 18% of the total American voting electorate, "are even more winnable," it was found, since they are +61 points on net to support a pro-innovation candidate.

The Cost of Gensler SEC's War on Crypto

The Blockchain Association said there have been 104 enforcement actions brought against the digital asset sector under Gensler through 2023. It added that crypto member firms faced with lawsuits and enforcement actions from the SEC have spent some $426 million "in defensive litigation."

Among the most high-profile lawsuits that the Wall Street regulator initiated in the industry is its case against Ripple, the world's largest holder of the XRP token, its complaint against crypto exchange giant Coinbase, and Wells notices against fintech titan Robinhood's crypto arm and NFT marketplace OpenSea, among others.

While the results are interesting, HarrisX has been criticized in the past for its polling methodology.

Political poll aggregator FiveThirtyEight ranks the firm low for transparency.

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