Gary Gensler, Chair of the United States Securities and Exchange Commission (SEC), has backed US President Joe Biden’s proposal for a record $2.4 billion in financing for the agency. The funds will be directed towards pointing out the need to crack down on “misconduct” in the cryptocurrency sector. According to Gensler, the regulator is overburdened and in need of greater funds to keep up with the “increased complexity in the capital markets.”
The SEC and the crypto industry have been locked in a head-to-head battle for a while now. SEC has been raining hard on the industry and hitting them with notices. Recently, Coinbase was hit with a Wells notice which fired up Brian Armstrong, the CEO of the company. He asked the SEC to set up proper rules and regulations for the industry. Earlier, companies like Kraken and Paxos have been scrutinised by the SEC.
In prepared testimony for the House Appropriations Committee’s March 29 budget hearing, Gensler stated that greater financing was required to keep up the pace of innovation while ensuring no wrongdoings occurred.
“we’ve seen the Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class. Such growth and rapid change also mean more possibility for wrongdoing.”
According to Gensler, the increased funds would allow the SEC to hire 170 more employees, the majority of whom would work in its enforcement and examination divisions. The SEC chair stated that the previous year’s budget boost allowed it to grow its staffing levels above what they were in 2016, but that the regulatory agency was still strained thin.
This is not the first time Gelsner has called the crypto industry ‘the wild west’. The US Army organized its first Twitter Spaces event of 2023 on January 11, 2023, with Gensler and SEC commissioner Caroline Crenshaw joining the debate to give financial advice on how and where US soldiers should spend their money. Sergeant Lawrence Holmes mentioned that “there are soldiers who look for those alternative investments [such as] crypto assets,” and he asked the couple about the hazards of crypto investing.
“It’s the Wild West,” Gensler replied, adding that “the vast majority of these 10,000 or 15,000 tokens will fail.”
The recent actions of the SEC have come under the scrutiny of Republicans like French Hill and Ted Cruz have been supporting the crypto industry. Hill even claimed the SEC is driving away the crypto industry. Even some Democrats are worried by the actions of the SEC towards crypto and have openly supported the industry.
According to Dennis Porter, co-founder of the Satoshi Action Fund, many pro-crypto Democrats are lined up to express their disapproval of the party’s policy. Senator Kirsten Gillibrand has asked for a rulebook to be established for the industry. It has also been announced that Gensler will have to stand up to Congress and be answerable for his actions against the industry. The SEC and the crypto industry need to find a common ground. Collaboration is needed in order to lay down rules for the new and upcoming crypto industry.
