Gary Gensler the SEC Chair is claiming the regulator is low on funds and needs additional dollars to keep up with new and increased complexity in the capital markets
Gary Gensler, the chair of the United States Securities and Exchange Commission (SEC), has expressed his support for President Biden’s request to allocate a record $2.4 billion in funding for the regulator, citing the need to combat “misconduct” in the cryptocurrency industry.
Gensler made the remarks in prepared testimony for the House Appropriations Committee’s March 29 budget hearing, stating that the additional funding was necessary to keep up with the pace of innovation. He added :
“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.”
Mr Gensler has stated that the proposed $2.4 billion funding for the regulator, if approved, would allow for the hiring of 170 additional staff primarily for its enforcement and examination divisions. While the prior year’s budget increase helped bring staffing levels above 2016 levels for the first time, Gensler emphasized that the SEC is still understaffed and stretched thin. he then went on to add
“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.”
The SEC Chair then reiterated his characterization of the cryptocurrency industry as the “wild west” and warned that it is “rife with noncompliance,” putting investors’ “hard-earned assets at risk in a highly speculative asset class.”
SEC Enforcement
Gensler revealed that the SEC received over 35,000 tips, complaints, and referrals in FY 2022, resulting in more than 750 enforcement actions and orders for $6.4 billion in penalties and disgorgement. Out of these actions, 30 were related to the crypto industry and resulted in $242 million in monetary penalties, which is a 36% increase from the 22 actions announced in 2021.