U.S. Securities and Exchange Commission Seeks Additional Funding to Address Crypto Challenges
The U.S. Securities and Exchange Commission (SEC) has requested an additional $158 million for its 2025 budget to tackle the growing complexities in financial markets, particularly those arising from the crypto sector.
SEC’s Budget Request
According to the SEC’s March 11 Congressional Budget Justification, the agency is seeking a total budget of $2.594 billion for the 2025 fiscal year, which is an increase from the $2.436 billion requested in 2024.
Rapid Technological Advancements
In the budget justification document, SEC Chair Gary Gensler highlighted how rapid technological advancements are reshaping markets and business models. He specifically mentioned the emergence of new communication channels like Reddit forums and celebrity influencers.
Challenges in the Crypto Markets
Gensler also emphasized the challenges posed by the crypto markets, referring to them as a “Wild West” characterized by noncompliance and speculative behavior. He stressed the need for increased resources to effectively address potential wrongdoing in these markets.
Staff Expansion
- The SEC plans to expand its staff across various divisions, aiming for a total of 5,621 positions in 2025 compared to 5,473 in 2024.
- The Division of Examinations seeks 23 additional staff members to address the unique risks associated with crypto markets.
- The Office of Investor Education and Advocacy (OIEA) plans to add a position specializing in fraud related to crypto securities.
- The Office of the General Counsel (OGC) requires two additional positions – one for increased litigation against the Commission and another to strengthen its whistleblower program.
SEC Reports Increase in Crypto-Related Enforcement Actions
Gensler revealed that the SEC received more than 35,000 separate tips, complaints, and referrals in FY 2022, which aided the agency in bringing over 750 enforcement actions resulting in orders for $6.4 billion in penalties and disgorgement.
Specifically, there were 30 enforcement actions related to the crypto industry, leading to $242 million in monetary penalties. This represents a 36% increase compared to the 22 actions announced in 2021.
The SEC’s performance report for 2023 highlighted an increase in crypto-related enforcement actions. However, it fell short of some performance targets, including the percentage of lawsuits won on at least one claim.
Despite ongoing litigation cases against major exchanges like Binance, Coinbase, Terraform Labs, Ripple, and Kraken, the SEC remains committed to protecting investors and maintaining market integrity.
Hot Take: SEC Seeks Increased Funding to Tackle Crypto Challenges
The U.S. Securities and Exchange Commission has requested an additional $158 million for its 2025 budget to address the growing complexities in financial markets, with a particular focus on challenges arising from the crypto sector. The agency’s budget request comes as rapid technological advancements reshape markets and business models. SEC Chair Gary Gensler highlighted the need for increased resources to combat potential wrongdoing in the crypto markets, referring to them as a “Wild West” characterized by noncompliance and speculative behavior. The SEC plans to expand its staff across various divisions and increase enforcement actions related to cryptocurrencies. Despite falling short of some performance targets, the SEC reported an increase in crypto-related enforcement actions and remains committed to protecting investors and maintaining market integrity.
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