Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), has backed President Biden’s call for the regulator to receive a record $2.4 billion in funding, underlining the continuous need to take action against “misconduct” in the cryptocurrency sector.
Gensler stated that more money was required to keep up with innovation in prepared remarks for the House Appropriations Committee’s budget hearing on March 29. He continued, “Rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, not least in the crypto space. More resources, knowledge, and tools are needed to address this.
According to Gensler, the new funds would enable the SEC to hire 170 additional employees, the majority of whom would work in its enforcement and examination divisions.
The regulatory body was nonetheless overburdened, the SEC chair said, adding: “As the cop on the beat, we must be able to meet the match of criminal actors.” The SEC chair said that the prior year’s budget increase allowed it to raise staffing levels above what they were in 2016 for the first time. Thus, it makes sense for the SEC to expand in tandem with the development and rising complexity of the capital markets.
Using the analogy of the Wild West once more, Gensler claimed that the cryptocurrency market is “rife with noncompliance” and that investors are risking their “hard-earned funds in a highly speculative asset class.”
In FY 2022, the regulator “received more than 35,000 separate tips, complaints, and referrals from whistleblowers and other sources,” according to Gensler. This helped it bring more than 750 enforcement actions and “resulted in orders for $6.4 billion in penalties and disgorgement,” according to Gensler.
A total of 30 of these proceedings involved the cryptocurrency sector, resulting in $242 million in fines, a 36% increase over the 22 cases announced in 2021.