Gary Gensler, chairman of the United States Securities and Exchange Commission, has endorsed U.S. President Joe Biden’s proposal to commit a record $2.4 billion in financing for the regulator, emphasizing the continuous need to combat “misconduct” in the cryptocurrency business.
In prepared testimony for the March 29 budget hearing with the House Appropriations Committee Gensler stated that the additional funding was necessary to maintain the rate of innovation, adding that:
“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.”
The additional funding would allow the SEC would be able to hire 170 additional staff members, the majority of whom would work in its enforcement and examination divisions.
The SEC chair stated that the prior year’s budget increase allowed it to bring staffing levels above 2016 levels for the first time, but that the regulatory agency was still understaffed, adding:
“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.”
Gensler again described crypto as the wild west, suggesting the nascent industry is “rife with noncompliance” and that crypto investors were putting “hard-earned assets at risk in a highly speculative asset class.”
According to Gensler, the agency “received over 35,000 tips, complaints, and referrals from whistleblowers and others in FY 2022,” which enabled it to pursue over 750 enforcement cases and “resulted in orders for $6.4 billion in fines and disgorgement.”
Thirty of these proceedings involved the crypto business, resulting in $242 million in monetary penalties, a 36% increase over the 22 cases announced in 2021.