Chairman of the Securities and Exchange Commission, Gary Gensler, has expressed his support for President Joe Biden’s call to provide the regulator with an unprecedented $2.4 billion in funding. This move underlines the urgency of taking action against “misconduct” in the cryptocurrency industry.
Speaking at a hearing on March 29 before the House Appropriations Committee, Gensler emphasized the importance of maintaining the government’s pace of innovation, which requires the additional funding. In his prepared remarks, he stated that this funding is necessary to ensure the continued progress of the agency.
“Rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, not least in the crypto space. Addressing this requires new tools, expertise, and resources.”
Gensler projects that with the extra funding, the SEC could recruit around 170 new employees, primarily for the compliance and inspection divisions.
Although the agency managed to surpass its 2016 staffing levels after last year’s budget increase, Gensler recognized that there is still more work to be done and that the SEC requires further financial support.
“As the cop on the beat, we must be able to meet the match of bad actors. Thus, it makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets.”
Drawing on the Wild West analogy once again, Gensler asserted that the cryptocurrency market is “rampant with noncompliance” and that investors are putting their hard-earned assets at risk in a highly speculative asset class.
In the fiscal year of 2022, Gensler reported that the SEC received over 35,000 tips, complaints, and recommendations from whistleblowers and other sources, which helped the agency initiate over 750 enforcement cases.
These cases resulted in orders for $6.4 billion in penalties and disgorgement. Of the 30 enforcement actions disclosed in 2022, 22 were related to the cryptocurrency industry, resulting in $242 million in fines – a 36% increase from the 22 actions disclosed in 2021.
