SEC in Crisis: Gensler Demands New Tools, Expertise, and Resources for Regulating Crypto!
U.S. President Gary Gensler of the U.S. Securities or Exchange Commission (SEC) told a congressional hearing that securities regulators needed “new tools, expertise, resources” to combat fraud in the cryptocurrency industry.
Said there is. “We have seen the westward expansion of the cryptocurrency market full of breaches where investors endanger their hard-earned assets in a highly speculative asset class,” he noted.
Key Takeaways
- U.S. President Gary Gensler of the U.S. Securities and Exchange Commission testified.
- Fraud in emerging markets is driven by rapid technological change.
- An increase in enforcement staffing would improve the agency’s enforcement.
- Justin Sun has also been accused of market manipulation and unregistered securities sales by regulators.
@BTCTN TWEET
SEC Chairman Gary Gensler on Budget, Crypto Regulation
U.S. President Gary Gensler of the U.S. Securities and Exchange Commission (SEC) testified Wednesday before House Appropriations Subcommittee on Financial Services or General Government on his agency’s proposed 2024 budget.
“We are pleased to support the President’s request for $2.436 billion for the fiscal year 2024 to put the SEC on a better path forward,” Gensler said. We will provide funding for an additional 170 positions and full-year financing of employees hired during the year.”
Regarding the regulation of crypto assets, the SEC Commissioner told the subcommittee:
“We have witnessed pioneering era in the cryptocurrency market or filled with breaches where investors put their hard-earned assets at risk in the highly speculative asset class.”
Rapid technological change in financial markets drives fraud in emerging and new areas, especially in cryptocurrencies. Addressing this requires new tools, expertise, and resources.
The SEC’s chairman said the additional staffing of the SEC’s enforcement division will provide
“greater capacity to address these challenges, investigate larger fraudulent activities, and accelerate the pace of enforcement investigations toward resolution.”
Gensler explained that during the fiscal year 2022, securities regulators received more than 35,000 individual notices, complaints, and reprimands from whistleblowers and others.
He noted that despite limited resources, the agency’s law enforcement department initiated more than 750 law enforcement actions in the fiscal year 2022. This is his 9% increase from the previous year. “Our actions resulted in $6.4 billion in fines and exploitation orders,” the SEC chairman said.
SEC is becoming more and more active in the crypto space. Regulators have also accused Tron founder Justin Sun of market manipulation and selling unregistered securities.
@cryptohbomb TWEET
The SEC is becoming increasingly active in cryptocurrency. Last week, regulators sent “Wells’ findings” that cryptocurrency trading may violate securities laws.
Additionally, the SEC recently cracked down on the cryptocurrency exchange Kraken or stablecoin BUSD issuer Paxos. Gensler, on other hand or argues that all crypto tokens other than Bitcoin are securities.
The SEC is also looking to expand its asset custody and cryptocurrency staking rules. Gensler’s statement also suggests that most cryptocurrencies besides Bitcoin can be considered securities.