SEC Chair Gary Gensler Calls for Increased Funding to Combat Crypto Misconduct
United States Securities and Exchange Commission Chair, Gary Gensler, has expressed his support for President Joe Biden's request to allocate a record $2.4 billion in funding to the SEC.
In his prepared testimony for the budget hearing with the House Appropriations Committee on March 29, Gensler argued that the regulator needs additional funding to keep up with the “increased complexity in the capital markets.”
He specifically highlighted the need to crack down on “misconduct” in the cryptocurrency industry, calling it the “wild west” and stating that it is “rife with noncompliance.”
New funding to address technological innovation and emerging misconduct
Gensler elaborated that rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, particularly in the crypto space. To address this, he argued that the SEC requires new tools, expertise, and resources, which can only be achieved through additional funding. The SEC chair stated that this would allow the SEC to hire 170 additional staff, most of whom work in the enforcement and examination divisions.
In his prepared testimony, Gensler also revealed that the SEC received over 35,000 separate tips, complaints, and referrals from whistleblowers and others in FY 2022.
He stated that these helped the regulator bring over 750 enforcement actions, resulting in orders for $6.4 billion in penalties and disgorgement. Of the 750 enforcement actions, 30 were related to the crypto industry, resulting in $242 million in monetary penalties, a 36% increase over the 22 actions announced in 2021.
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The need for SEC to keep pace with increased complexity in the capital markets
Gensler also highlighted that the SEC’s prior year’s budget increase allowed it to bring staffing levels above what it was in 2016 for the first time. However, he argued that the regulatory agency was still stretched thin and needed additional funding to keep up with the pace of innovation.
The SEC must be able to meet the match of bad actors. Therefore, it makes sense for the agency to grow with the expansion and increased complexity in the capital markets.
According to Gensler, crypto investors are putting their “hard-earned assets at risk in a highly speculative asset class.” He warned that the SEC would continue to crack down on misconduct in the crypto space and ensure that investors are protected from potential harm.
Andrey Kunev
Reporter at CoinsPress
Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.
