SEC Chief to Face Congress on Crypto Stance as Biden Administration Proposes $2.4 Billion Boost for Agency
Gary Gensler, the chairperson of the Securities and Exchange Commission (SEC) of the United States, has expressed his support for President Biden‘s proposal to allocate a record-breaking amount of $2.4 billion in funding for the regulator.
Gensler emphasized the persistent need to crack down on misconduct in the cryptocurrency industry, as rapid technological advancements in financial markets have given rise to such misconduct in emerging and new areas, particularly in the crypto industry.
In his prepared statement for the March 29 budget hearing with the House Appropriations Committee, Gensler stated that the SEC needs additional resources, expertise, and tools to address this issue.
The proposed funding will enable the SEC to hire 170 more staff, mostly in its enforcement and examination divisions.
According to Cointelegraph, the SEC chairperson acknowledged that last year’s budget increase had enabled the regulatory agency to surpass its staffing levels from 2016 for the first time. However, Gensler also stated that the SEC was still understaffed and overworked.
As the primary regulatory body, the SEC must be adequately equipped to combat wrongdoings in the industry. Therefore, it is crucial for the SEC to keep up with the growth and complexity of capital markets.
Gensler reiterated his view of the crypto industry as the wild west, stating that it is rampant with noncompliance. He warned investors that putting their hard-earned assets in such a speculative asset class is risky.
In the fiscal year 2022, the SEC received over 35,000 tips, complaints, and referrals, which assisted in the enforcement of over 750 actions, resulting in penalties and disgorgement orders amounting to $6.4 billion.
Out of the 750 enforcement actions, 30 of them pertained to the crypto industry, leading to $242 million in monetary penalties. This represents a 36% increase from the 22 actions announced in 2021.
Crypto regulation in focus as SEC Chair appears before congress
Gary Gensler, the head of the Securities and Exchange Commission (SEC) of the United States, is scheduled to appear before the House Financial Services Committee for the first time.
The committee has jurisdiction over all aspects of the US financial services industry, including digital assets, banking, and securities.
The committee’s chairman, Patrick McHenry, confirmed in an interview that the SEC chief would be questioned on April 18 regarding his approach to the crypto ecosystem. This will be the first time the committee conducts an oversight hearing of the SEC, which will focus on Gensler’s rulemaking and approach towards crypto assets.
McHenry emphasized that the committee would take a serious approach to establishing a regulatory framework for digital assets and would exercise significant general oversight over the SEC.
The crypto community has been closely watching the SEC chief’s approach to the industry, with many members of the Democratic party expressing their concerns.
Some in the crypto industry fear that the party’s anti-crypto stance could harm its chances in the 2024 election campaign. Dennis Porter, the co-founder of the Satoshi Action Fund, noted that numerous pro-crypto and pro-Bitcoin Democrats are speaking out against the party’s position.
In the first few months of 2023, US regulators have been firm with the crypto industry, with the SEC sending Wells notices to multiple crypto companies, including Coinbase.
Additionally, the Commodity Futures Trading Commission has filed a new lawsuit against Binance. However, the crypto community has always emphasized that regulations would be determined by Congress rather than individual agencies.