Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), has urged the government to provide the agency with $2.4 billion in funding to help tackle the rise of unregistered crypto companies.
Addressing the House Financial Services Subcommittee, Gensler explained that the allocation of these funds for fiscal year 2024 would enable the SEC to hire 170 additional law enforcement officers and support 5,139 full-time employees, ultimately improving the agency’s ability to prosecute crypto industry misconduct.
While acknowledging the growth of the crypto industry and its increasing adoption in financial markets, Gensler stressed that this has led to a rise in fraudulent activities, which requires the SEC to possess new tools, experience, and resources to address effectively.
Last year alone, the SEC received over 35,000 whistleblower complaints and filings, resulting in over 750 enforcement actions and fines worth $6.4 billion.
Of these, 30 enforcement actions were related to the cryptocurrency industry, and fines worth $242 million were levied against crypto firms.
Gensler emphasized that the SEC needs to expand as the capital markets become more complex and evolve to meet the challenges posed by new technologies.
In his view, the cryptocurrency market is currently a “Wild West” full of non-compliance, with investors putting their hard-earned money at risk by investing in high-risk assets.
He argued that digital assets should be governed by the same rules as the stock market, adding that all crypto assets that use the Proof-of-Stake (PoS) consensus algorithm should be regulated as securities.
Overall, Gensler’s message to Congress was clear: more funding is required to strengthen the SEC’s ability to regulate the rapidly growing crypto industry and protect investors from fraudulent activities.