Crypto Crackdown: SEC Chair Backs $2.4B Funding Boost To Modernize Rules

The United States Securities and Exchange Commission (SEC) Chair, Gary Gensler, has backed President Joe Biden’s call for the regulator to receive a record-breaking $2.4 billion in funding to crack down on misconduct in the cryptocurrency industry. 

SEC’s Role in Protecting Public & Modernizing Rules For Crypto Markets

Gensler emphasized the need to modernize SEC rules to keep pace with technological advancements in today’s $100 trillion capital markets. In prepared testimony for the March 29 budget hearing with the House Appropriations Committee, he noted that the growth and rapid changes in the markets increased the possibility of misconduct and noncompliance. 

Gensler pointed out that the recent market volatility also highlighted the SEC’s need to be adequately resourced. The SEC oversees entities ranging from start-ups to multinational corporations and markets, including broker-dealers, stock exchanges, clearinghouses, mutual funds, and asset managers. 

Gensler explained that the SEC’s work to oversee federal securities laws played a vital role in America’s economic success and geopolitical standing around the globe for 90 years. The SEC’s clients include the 330 million Americans who invest in their 401(k)s and IRAs, trade through brokerage apps or use robo-advisers.

Gensler praised the SEC’s dedicated staff and their remarkable work with limited resources. However, he pointed out that the SEC’s oversight function is vast, and its talented staff’s demands have grown dramatically. 

He noted that recent growth and changes in communications and the crypto markets had exposed investors to highly speculative asset classes, putting their hard-earned assets at risk. 

Gensler reiterated that as the cop on the beat, the SEC must meet the match of bad actors. He believes that allocating $2.4 billion to the SEC will enable the agency to be an even stronger advocate for the American public, investors, and issuers alike.

Nevertheless, Gensler’s testimony highlighted the SEC’s critical role in protecting the public and the need to modernize its rules to keep pace with technological advancements. The allocated funding will help the SEC expand and increase its complexity in the capital markets to meet the demands of its vast oversight function. 

The SEC’s deficit-neutral appropriations, offset by transaction fees, ensure the agency’s funding is secure. The SEC’s work to oversee federal securities laws plays a crucial role in the American public’s financial stability and the country’s economic success and geopolitical standing worldwide.

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