U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler told a congressional hearing that securities regulators “need new tools, expertise and resources” to combat fraud in the crypto space ” We have seen the Wild West of the crypto market where non-compliance is rampant.” Investors are putting their hard-earned assets at risk in a highly speculative asset class.” He emphasized.
SEC Chairman Gary Gensler on budget requests and crypto regulation
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testified before the House Appropriations Committee’s Subcommittee on Financial Services and General Government on Wednesday about the agency’s fiscal year (FY) 2024 budget request.
“I am pleased to support the President’s FY 2024 request of $2.436 billion to put the SEC on a better trajectory for the future.” Gensler began.” The FY 2024 request seeks additional funding for 170 positions as well as full-year funding for staff hired in FY 2023.”
On the regulation of crypto assets, the SEC chief told the subcommittee: “We have seen the Wild West of the crypto market where non-compliance is rampant.” “Investors are putting their hard-earned assets at risk in a highly speculative asset class.” He emphasized:
Rapid technological innovation in the financial markets has led to fraud in emerging and new areas, including the crypto space. Addressing this requires new tools, expertise, and resources.
The SEC Chairman added that the additional staff will enhance the SEC’s enforcement division’s ability to “address these challenges, investigate larger-scale fraud, and accelerate the pace of enforcement investigations to resolution.”
Gensler explained that the securities watchdog received more than 35,000 individual tips, complaints, and referrals from whistleblowers and others in FY2022. He also noted that even with limited resources, the agency’s enforcement division conducted more than 750 enforcement actions in FY 2022, a 9% increase over the previous fiscal year, and the SEC Chairman stated that “our actions resulted in $6.4 billion in fines and disgorgement orders.”
The SEC has become increasingly active in the crypto space. Last week, the regulator sent Coinbase a “Wells Notice” regarding possible securities law violations by the crypto exchange. The SEC also charged Tron founder Justin Sun with market manipulation and offering unregistered securities. In addition, the SEC recently took action against crypto exchange Kraken and stablecoin BUSD issuer Paxos. Gensler, on the other hand, claims that all crypto tokens other than Bitcoin are securities.
What do you think of SEC Chairman Gary Gensler’s statement that securities regulators need “new tools, expertise, and resources” to regulate the crypto sector? Please let us know.