Gary Gensler: SEC Needs New Tools, Expertise, and Resources to Regulate Crypto Industry

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said in a congressional hearing that the securities regulator “requires new tools, expertise, and resources” to combat misconduct in the crypto space. “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,” he stressed.

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, testified on his agency’s Fiscal Year (FY) 2024 budget request before the House Appropriations Subcommittee on Financial Service and General Government Wednesday.

“I am pleased to support the President’s FY 2024 request of $2.436 billion for the SEC, to put us on a better track for the future,” Gensler began. “The FY 2024 request seeks funding for an additional 170 positions, as well as full-year funding for those staff hired in FY 2023.”

Commenting on the regulation of crypto assets, the SEC chief told the subcommittee: “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.” He emphasized:

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 SEC chairman added that the additional staff will provide the SEC’s Enforcement Division “with more capacity to meet these challenges, investigate misconduct on a larger scale, and accelerate the pace of enforcement investigations to resolution.”

Gensler explained that the securities watchdog received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others in FY 2022. He noted that even with limited resources, the agency’s Enforcement Division brought more than 750 enforcement actions in FY 2022, a 9% increase over the prior year. “Our actions resulted in orders for $6.4 billion in penalties and disgorgement,” the SEC chairman said.

The SEC has been increasingly active in the crypto space. Last week, the regulator sent Coinbase a “Wells notice” about the crypto exchange’s potential violations of securities law. The regulator also charged Tron founder Justin Sun for market manipulation and offering unregistered securities. In addition, the SEC recently took action against crypto exchange Kraken and stablecoin BUSD issuer Paxos. Meanwhile, Gensler has maintained that all crypto tokens other than bitcoin are securities.

What do you think about SEC Chairman Gary Gensler saying that the securities regulator needs “new tools, expertise, and resources” to regulate the crypto sector? Let us know in the comments section below.