- According to Gary Gensler, to keep up with the “increased complexity in the capital markets,” the regulator is underfunded and overworked.
- The regulator received more than 35,000 tips from whistleblowers and other parties and complaints and recommendations from other parties.
Gary Gensler, the chairman of the Securities and Exchange Commission, has backed U.S. President Joe Biden’s demand for the regulator to receive a record $2.4 billion in the financing, highlighting the necessity of continuing to take action against “misconduct” in the cryptocurrency sector.
During the hearing on March 29, House Appropriations Committee chair Gensler said in prepared remarks that the additional money was needed in order to maintain the pace of innovation within the government. He continued:
“Rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, not least in the crypto space. Addressing this requires new tools, expertise, and resources.”
Gensler estimates that if the extra funding were provided, the SEC could hire 170 more employees, most of whom would be included in its compliance and inspection divisions, as a result of the additional funding.
It was acknowledged that the SEC had been able to raise staffing levels above those of 2016 for the first time as a result of the previous year’s budget increase; however, the chair added that the SEC still needed to be more financially supported with work.
“As the cop on the beat, we must be able to meet the match of bad actors. Thus, it makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets.”
Using the analogy of the Wild West once more, Gensler claimed that the cryptocurrency market is “rife with noncompliance” and that buyers are risking their “hard-earned assets in a highly speculative asset class.”
During the fiscal year of 2022, according to Gensler, the regulator received more than 35,000 tips from whistleblowers and other parties, as well as complaints and recommendations from other parties. This helped it bring more than 750 enforcement cases and “resulted in orders for $6.4 billion in penalties and disgorgement,” according to Gensler.
In addition to the 22 actions disclosed in 2021, thirty of these enforcement actions were related to the cryptocurrency business, costing $242 million in fines, an increase of 36% from the 22 actions disclosed in 2021.