The Chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, is urging Congress to increase the funding for the SEC to confront the “risks present in the cryptocurrency markets.” During a Senate hearing, Gensler pointed out the unruly nature of crypto markets, highlighting how investors are putting their hard-earned money into a highly speculative asset class teeming with noncompliance.
SEC Pushes for Additional Resources to Monitor Cryptocurrency
In his testimony on Wednesday before the U.S. Senate Appropriations Subcommittee on Financial Services and General Government, Gensler, who leads the SEC, addressed issues related to cryptocurrency as part of the SEC’s budget request for the Fiscal Year (FY) 2024.
We are witnessing the untamed frontier of the cryptocurrency markets, teeming with noncompliance, where investors are risking their hard-earned money in a highly speculative asset class.
“With such growth and swift change comes increased potential for misconduct. As the regulatory authority on duty, we must be prepared to confront malevolent actors,” he added. “With sufficient funding commensurate to the scope of our mission, we can serve as an even more potent advocate for all American stakeholders — investors and issuers alike.”
He added, “Our FY 2024 request would enable [the Division of Enforcement] to expand to 1,144 FTEs [full-time equivalents], helping it to stay abreast with the market complexities of the past decade. Most of this growth pertains to full-year funding for the staff positions authorized and hired in FY 2023.”
He further clarified:
The additional resources would augment the Division’s capacity to safeguard American families by managing risks in the cryptocurrency markets, cyber and information security, and the durability of key market infrastructure.
Gensler often faces backlash for his regulatory approach towards the cryptocurrency sector. He has previously stated that all cryptocurrency tokens, except Bitcoin, should be treated as securities. However, the Southern District Court of New York recently ruled that XRP is not a security. Gensler expressed that the SEC was “disappointed” by the judgment, mainly due to its potential implications for retail investors.
Frequently Asked Questions (FAQs) about SEC Crypto Market Regulation Funding
What is SEC Chairman Gary Gensler’s request to Congress?
Gary Gensler has requested Congress to increase the funding for the Securities and Exchange Commission (SEC) in order to better manage and address the risks associated with the cryptocurrency markets.
Why does Gensler believe increased funding is necessary for the SEC?
Gensler identifies the cryptocurrency market as a highly speculative asset class, where investors often put their hard-earned money at risk. With its rapid growth and change, he believes the possibility for wrongdoing has also increased. Therefore, additional resources are required to confront these challenges and protect American investors.
What is the budget request for the SEC for Fiscal Year 2024?
The budget request for the SEC for the Fiscal Year 2024 is $2.436 billion, as supported by Gensler. He believes this funding will put the agency on a stronger footing to address future challenges.
How will the additional funding be utilized according to Gensler?
The additional funding will be used to expand the Division of Enforcement, allowing it to keep pace with the market complexities of the past decade. The resources would also strengthen the division’s ability to protect American families by managing risks in the crypto markets, cyber and information security, and the resiliency of key market infrastructure.
What is Gensler’s view on regulating crypto tokens?
Gensler has previously stated that all cryptocurrency tokens, except Bitcoin, should be treated as securities. However, a recent ruling by the Southern District Court of New York contradicted this view by ruling that XRP is not a security. Gensler expressed disappointment with this decision, mainly due to its potential implications for retail investors.
More about SEC Crypto Market Regulation Funding
- U.S. Securities and Exchange Commission (SEC)
- Gary Gensler’s stance on Crypto Regulation
- Ruling of XRP as not a Security
- U.S. Senate Appropriations Subcommittee on Financial Services and General Government
- Crypto Market Risks