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- 1 Gary Gensler asked additional funding for SEC to combat crypto’s noncompliance.
- 2 The agency is already given substantial funding, keeping inflation into account.
Gary Gensler pitched the U.S. Senate Committee to grant additional funds to SEC for protecting investors against the crypto industry. The United States Securities and Exchange Commission (SEC) Chairman has asked for tens of million dollars worth of additional funding for his agency as he argues the industry is “rifled with noncompliance.”
Gensler asked for funds during a hearing hosted by the Financial Services and General Government Subcommittee of the Senate Committee on Appropriations on July 19, 2023.
Gary Gensler Asked for Additional Funding for SEC
Many in the crypto industry have criticized the SEC chair for waging war against them with the regulatory crackdown. The agency has sued multiple crypto entities, most of which are on counts of unregistered securities. These actions have created a hostile environment for the industry to operate in the United States, forcing them to move their businesses offshore.
Arguing that the digital asset class is highly speculative and the scenario is like the old Wild West, he said that novice investors place their hard-earned money into these unregulated and volatile markets, resulting in losses. With the funding, Gensler wishes to strengthen the agency to safeguard the American public against the industry’s ill effects.
As the SEC is known to have taken the baton to regulate the industry and crack down on crypto crimes, it is asking for an additional fund of $72 Million, along with numerous full-time staff members, to be added to its roaster. Last week, the committee approved a $2.364 Billion fund to the agency for 2024. The committee chairman argues that the allotted amount is enough to support the current staff keeping inflation into account.
What is the Need for Additional Funds?
The financial watchdog has 4,685 people on its payroll in 2023. Around half of them focus on enforcement and examination duties, as informed by Gensler. The additional funding would be used to add 170 personnel to its team and provide full-year funding for staff hired in 2023. This addition would bring the grand total of employees to 5,139.
Gensler argued that if the fund were allocated, the agency would scale its mission and become more vital to advocate the American citizens, investors, and issuers against any lousy event. SEC would be able to address fraud and manipulation and counteract lower risks in the system.
During his testimony, Gensler said that the whole crypto industry is built around specific models which cannot be allowed in the traditional securities market. Also, the industry has negatively affected more American than it should have. On many occasions, Gary Gensler has made public remarks about bringing the crypto industry under compliance, but during the recent hearing, he seemed more adamant.
The Crypto Industry and Lawmakers Are Not Happy With Gensler
On June 12, 2023, Rep. Warren Davidson, and House Majority Whip Tom Emmer, presented the SEC Stabilization Act in the United States House of Representatives. The bill seeks to restructure the entire agency and hints towards replacing the current chair Gary Gensler.
The legislation aims to fix the “abuse of power” and protect the financial market’s best interests. Under Gensler’s jurisdiction, the regulatory actions against the crypto industry have surged by nearly 183%, especially after the FTX-saga. Moreover, this number does not include the lawsuits against the world’s biggest crypto exchange and Coinbase, which was sued for trading unregistered securities and other counts.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
