SEC Chair Gary Gensler is making a strong push to crack down on cryptocurrency “misconduct” with the support of U.S. President Joe Biden.
In a March 29th budget hearing with the House Appropriations Committee, Gensler supported Biden’s request to allocate a record $2.4 billion in funding for the regulator.
The additional funding is needed to keep up with the pace of innovation and address the misconduct that has emerged in the cryptocurrency industry, according to Gensler.
Crypto: The wild west of finance
Gensler’s focus on crypto comes as no surprise. He has previously referred to the cryptocurrency market as the “Wild West” of finance, and he reiterated this view during the hearing.
He stated that the nascent industry is “rife with noncompliance,” and investors are putting their hard-earned assets at risk in a highly speculative asset class.
The SEC has received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others in 2022. Gensler claims that these tips have helped the regulator bring more than 750 enforcement actions that resulted in orders for $6.4 billion in penalties and disgorgement.
Thirty of these actions were related to the crypto industry, which resulted in $242 million in monetary penalties and represents a 36% increase over the 22 actions announced in 2021.
Gensler stated that the additional funding would allow the SEC to hire 170 additional staff, most of whom would work within its enforcement and examination divisions.
He believes that the SEC needs to grow along with the expansion and increased complexity in the capital markets to be able to meet the match of bad actors.
Gensler requests for $2.43 billion
Gensler is seeking a massive $2.43 billion for the SEC to continue its enforcement actions against what it deems as “bad actors” in the crypto industry.
The budget will go towards funding an additional 170 positions, as well as full-year funding for those staff hired in 2023. The budget request for 2024 would support 5,139 full-time employees.
The Division of Enforcement and Examinations accounts for about half of the SEC’s staff. It received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others in 2022.
Furthermore, the Enforcement Division brought more than 750 enforcement actions last year, resulting in orders for $6.4 billion in penalties and disgorgement.
Despite the repeated threats and actions from Uncle Sam, the crypto markets have shrugged them off. Total market capitalization had reached $1.22 trillion at the time of writing, with a 2.4% gain on the day, wiping out all losses from the CFTC Binance lawsuit earlier this week.
The need for additional funding to crack down on “misconduct” in the cryptocurrency industry is clear, and Gensler is making a strong push to get it.
The SEC chair is seeking a whopping $2.43 billion for the regulator to continue its enforcement actions against what it deems as “bad actors” in the crypto industry.
While the crypto markets have been largely unfazed by the SEC’s actions so far, the SEC’s increased funding could change that in the future.
It remains to be seen how effective Gensler’s crackdown on crypto misconduct will be and what impact it will have on the industry. Nonetheless, the SEC’s focus on cryptocurrency is unlikely to diminish anytime soon.
