SEC chief seeks $109 million to bolster investor protections in the crypto market

SEC is seeking additional funding of $109 million to bolster enforcement capabilities in the digital asset market. This was announced at congressional hearings by Gary Gensler, the agency head.

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According to the official, the cryptocurrency industry is ‘rife with examples of non-compliance’.

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\”We’ve seen the Wild West […], where investors put their hard-earned funds at risk in a highly speculative asset class,\” said Gensler.

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The head of the SEC explained that the additional resources would bolster the Commission’s role as “protector of the public interest — both investors and issuers.”

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\”Rooting out fraud, manipulation and abuse reduces risks in the system,\” — he added.

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The Commission chair proposed increasing the agency’s resources by $72 million. This amount would be used to hire a further 170 staff.

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The agency currently employs 4,685 people. About half of them work on enforcement and expertise.

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In the last financial year, the SEC initiated 750 enforcement actions (up 9% year over year). As a result the Commission collected $6.4 billion in fines.

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\”Rapid technological innovation has led to improper actions in developing and new areas, not least in the crypto space. Addressing this problem requires new tools, expertise and resources,\” said Gensler.

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The official requested an additional $393 million to enhance technological capabilities in cybersecurity and data analytics.

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In total, Gensler proposed increasing the agency’s budget by $454 million — from $4.7 billion to $5.1 billion.

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According to CoinDesk, lawmakers’ questions to Gensler showed differences in attitudes toward cryptocurrency and the SEC’s approach to regulating it.

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Thus, Senator John Kennedy asked about the reasons behind the Commission’s inaction regarding alleged fraud by FTX’s leadership.

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In response, Gensler noted that the platform’s headquarters were abroad, and that enforcement action takes time.

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Senator Richard Durbin asked the head of the SEC whether the regulator has adequate funds to oversee the industry.

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Their colleague J. Bill Hagerty expressed concerns about the loss of innovative potential and offshoring of business due to the regulator’s stance.

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Earlier in July 2023, Democratic congressman Richie Torres demanded an investigation into the Commission over its crypto-regulation approach.

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Earlier lawmakers introduced a bill to remove Gensler and restructure the SEC amid “ongoing abuses” by the agency head.

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