SEC Chairman Gensler calls Crypto ‘Wild West’ while asking for more money
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In an effort to combat new frontier cryptocurrency markets, US Securities and Exchange Commission (SEC) Chairman Gary Gensler has called for a budget increase for the agency. In his speech on July 19, he mentioned the need to be careful to prevent possible disobedience in this developing sector.
“We have seen a wild west in the crypto markets, full of insubordination […] I am pleased to support the President's fiscal year 2024 appropriation of $2.436 billion to put SEC operations on a better path for the future.
Gensler, who made these comments before the US Senate Appropriations Committee, emphasized the importance of the SEC's growth in the face of the increasing complexity of capital markets. Following 750 enforcement actions in fiscal year 2022, the SEC's Division of Enforcement set a record $6.4 billion in fines and forfeitures.
“Rapid technological innovations have led to misconduct in emerging and new areas of financial markets, not least in the crypto space. Addressing this requires new tools, knowledge and resources.”
The SEC's stance on “enforceable regulation” was not without its critics. In fact, several lawmakers, including U.S. Reps. Frances Hill and Dusty Johnson, support a shift to a legislative rulemaking approach.
The SEC cannot continue to regulate by coercion. The lawsuits against digital asset firms are not protecting the public and are stifling innovation and growth.
My letter to SEC Chairman Gensler ⬇️ pic.twitter.com/RjoBNs5YQs
— Rep. Dusty Johnson (@RepDustyJohnson) July 19, 2023
The representatives argue in favor of a statutory framework, a system that enforces compliance with regulatory rules from the outset, thereby providing consumer protection before harm occurs. They conveyed this view to Gensler in a July 19 letter, suggesting a preemptive strategy rather than the current reactionary enforcement measures.
Faced with the challenge of effectively selecting and approving what the SEC calls security, the SEC sees it as a way to protect investors from bad actors before they start:
“Such growth and rapid change means more opportunity for more destruction. As a cop on the beat, we need to be able to deal with bad actors. So it makes sense for the SEC to grow along with the expansion and complexity in the capital markets.
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