U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler asked the U.S. Senate Appropriations Committee on the 19th to increase the SEC’s $2.364 billion budget by $72 million (approximately ¥10.08 billion). In particular, he expressed the need to increase the size of the SEC to protect investors from the “non-compliance-ridden” crypto industry.
Gensler likened the cryptocurrency market to the Wild West and said he had seen compliance violations rampant. “Investors are putting their hard-earned assets at risk in highly speculative asset classes,” he said.
Required to hire additional full-time staff
The SEC is making extensive efforts to crack down on crypto-related crime. He said the $72 million he requested was needed to hire dozens more full-time employees. Gensler argued that the already approved budget of $2.364 billion for fiscal year 2024 was just enough to cover the number of employees currently allowed, given inflation.
Gensler showed data that the SEC will employ 4,685 people in 2023, about half of them dedicated to enforcement and investigative work. If the budget is increased, the SEC could add 170 positions to the team, he said. It will also provide full-year funding for staff hired in 2023, potentially bringing the SEC’s total number of full-time staff to 5,139.
“With funding commensurate with the size of our mission, we can become an even stronger advocate for the American people, including investors and issuers,” Gensler said.
Criticism of the SEC’s approach
Questions from lawmakers expressed mixed attitudes toward cryptoassets and the SEC’s approach to regulating them.
Senator John Kennedy has lashed out at Gensler for why the SEC didn’t nip the buds of fraud at the failed cryptocurrency exchange FTX in the bud.
“There’s this guy[former FTX CEO Sam Bankman-Fried]who did everything but buy Mount Rushmore. Are you curious where this guy gets all his money from?” Gensler, meanwhile, said FTX’s headquarters are in the Bahamas and the enforcement action will take time.
“Mr. Chairman, why did you and the SEC allow the FTX fraud to happen?”
— CoinDesk (@CoinDesk) July 19, 2023
Senator Richard Durbin appeared skeptical of cryptocurrencies in general and asked if the SEC had enough money to crack down on the industry.
Senator Bill Hagerty, on the other hand, had a different attitude. The senator emphasized his concerns, referring to metrics that are not generally familiar, such as stablecoin market share and the number of blockchain developers in the United States. The SEC’s “regulation by enforcement” and unclear rules are driving business and innovation offshore, he said.
｜Editing: Rinan Hayashi
｜Original: SEC Chair Gensler Cites ‘Wild West’ of Crypto in Case to Increase Agency’s Budget