SEC chair uses crypto enforcement in justification for FY2023 budget

SEC chair uses crypto enforcement in justification for FY2023 budget

Gary Gensler (chair of the United States Securities and Exchange Commission or SEC) raised concerns about the enforcement of cryptocurrency in the SEC’s budget request for the next fiscal.

Gensler, in written testimony at the Wednesday hearing of U.S. House Committee on Appropriations stated that he supports President Joe Biden’s request for more than $2.1 million for the SEC for FY2023, which would allow the regulatory body to hire 50 additional employees to its enforcement division. Gensler, the chair of the SEC, raised concerns about crypto markets. He said that they are “highly volatile” and “speculative”. The need for “new tools” and “expertise” was needed to enforce the law.

Gensler stated that the Division will have more resources to investigate misconduct and speed up enforcement actions with the addition of staff. It will also strengthen our litigation support, boost the capabilities of Crypto Assets and Cyber Unit and investigate the tens to thousands of tips, complaints and referrals we get from the public.

SEC chair Gary Gensler addresses the U.S. House Committee on Appropriations on Wednesday

Gensler addressed Brenda Lawrence, a Michigan representative, at the hearing and reiterated his belief that token project offerings fell within the regulatory purview of the SEC as securities. He should therefore be registered accordingly. The SEC chair stated that investors are currently “not well protected” due to restrictions on enforcement.

“We’ll use enforcement tools [against cryptocurrency trading platforms] but I prefer if the […] They’re not trying really to grow but we need to increase our resources at least six percent in order to grow our enforcement arm within this space.”

Gensler stated that he needed more funding to address issues in the growing crypto space. He cited 85-90 enforcement actions taken by the SEC against digital asset companies over the past year. Gensler also mentioned the recent volatility in crypto assets, possibly referring specifically to TerraUSD (UST).

Related: SEC doubles down in crypto regulation through expanding unit

A few lawmakers and regulators in the United States have been noticing recent volatility among major cryptocurrencies, including Bitcoin (BTC), and Ether (ETH), following the collapse Terra (LUNA). Janet Yellen, Treasury Secretary, addressed the House Financial Services Committee on May 12. She stated that TerraUSD (UST), and Tether (USDT), depegging from U.S. dollars was not a threat to financial stability due to the size of the stablecoin markets.

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