United States Securities and Exchange Commission Chair Gary Gensler has thrown his support behind U.S. President Joe Biden’s request to allocate a record $2.4 billion in funding for the regulator, highlighting the ongoing need to crack down on “misconduct” in the cryptocurrency industry.
In prepared testimony for the March 29 budget hearing with the House Appropriations Committee, Gensler said the additional funding was needed to keep up the pace of innovation, adding:
“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 to hire 170 additional staff, most of whom would work within its enforcement and examination divisions, said Gensler.
The SEC chair said that the prior year’s budget increase allowed it to bring staffing levels above what it was in 2016 for the first time, but said the regulatory agency was still stretched thin, 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 their “hard-earned assets at risk in a highly speculative asset class.”
According to Gensler, the regulator “received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others in FY 2022,” which helped it bring more than 750 enforcement actions and “resulted in orders for $6.4 billion in penalties and disgorgement.”
Thirty of these actions were related to the crypto industry, which resulted in $242 million in monetary penalties and represents a 36% increase over the 22 actions announced in 2021.