The United States Securities and Exchange Commission (SEC) needs additional funding to keep up with the increasing complexity in the capital markets, according to Chair Gary Gensler.
Gensler has expressed his support for President Joe Biden‘s proposal to allocate $2.4 billion in funding for the regulatory agency, citing the need to crack down on misconduct in the cryptocurrency industry.
In a budget hearing with the House Appropriations Committee on March 29, Gensler stated that rapid technological innovation in financial markets has led to misconduct in emerging and new areas, particularly in the crypto space. He emphasized the necessity for new tools, expertise, and resources to address this issue.
Gensler indicated that the additional funding would allow the SEC to hire 170 additional staff members, with most working in its enforcement and examination divisions. Last year’s budget increase allowed the SEC to exceed staffing levels from 2016 for the first time. However, the regulatory agency remains stretched thin.
As the “cop on the beat,” Gensler stressed the importance of keeping up with bad actors in the market. He described the crypto industry as the wild west, citing noncompliance and high speculation as significant risks for investors putting their hard-earned assets at stake.
The previous year, the SEC received over 35,000 tips, complaints, and referrals from whistleblowers and others. That resulted in over 750 enforcement actions and $6.4 billion in penalties and disgorgement.
Thirty of these actions were related to the crypto industry, with a total of $242 million in monetary penalties and a 36% increase from the 22 actions announced in 2021.
Overall, Gensler’s testimony highlights the SEC’s ongoing need for additional resources to combat the challenges posed by the rapidly evolving financial landscape, particularly in the crypto space.
However, the SEC and Gensler remain subject to an active investigation regarding their seemingly biased and unfair crackdown on crypto firms.
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