- SEC Chairman Gary Gensler seeks an additional $72 million funding for the agency, stressing the need for enhanced investor protection against a noncompliant crypto industry.
- The proposed increase in funding will add 170 positions to the SEC staff, potentially increasing its full-time equivalent to 5,139 employees, with a primary focus on enforcement and examination duties.
As the dawn of a new era of decentralized finance unfolds, SEC Chairman Gary Gensler emphasizes the urgency of safeguarding investor interests and enhancing regulatory compliance within the burgeoning crypto industry. In a recent appeal before the U.S. Senate Committee on Appropriations, Gensler proposed a $72 million budget increase for the SEC, terming the crypto market as the “Wild West” fraught with regulatory noncompliance.
The Cry for a Greater Regulatory Framework
Gensler’s candid testimony underscored the hazardous implications for investors who put their hard-earned assets at risk in a speculative asset class like cryptocurrencies. The heightened funding, Gensler suggests, would make the SEC an even more potent advocate for the public—investors and issuers alike—helping to stamp out fraud, manipulation, and system abuse.
The SEC’s quest to enforce stricter crypto regulations has led to a request for the supplementary budget to bring dozens more full-time employees on board. Gensler argues that the bipartisan-approved budget of $2.364 billion for fiscal year 2024 merely suffices to maintain the current staffing levels, considering inflation. With a staffing strength of 4,685 people in 2023, of which approximately half focused on enforcement and examination duties, the extra funds will enable the SEC to add 170 positions. This move could potentially boost the SEC’s total full-time equivalent to 5,139 employees.
Lawmakers’ Spectrum of Views
Responses from lawmakers presented a diverse spectrum of perspectives towards cryptocurrencies and the SEC’s regulatory approach. Senator John Kennedy, in a pointed interrogation, questioned Gensler about the SEC’s delay in unmasking the alleged fraud at the now-defunct crypto exchange FTX. On the other end, Senator Bill Hagerty expressed his concern that the SEC’s ‘regulation by enforcement’ approach and unclear rules could potentially drive business and innovation offshore.
Caught between the need for regulation and fostering innovation, the SEC’s next steps in shaping the crypto landscape remain under keen scrutiny, thus underscoring Gensler’s appeal for increased regulatory resources.