FY ’23 budget has a crypto twist; Here’s what SEC chair’s testimony says

Lavina Daryanani
Source: NotebookCheck

The SEC has been trying to actively keep an eye on the crypto sphere. Quite recently, the regulatory agency’s crypto team was expanded and 20 additional officials were added in a bid to crack down on projects that have been flouting investor-protection rules.

Additionally, the move also intended to better equip the SEC to police wrongdoing in the crypto markets while continuing to identify disclosure and control issues with respect to cybersecurity.

Reflecting the same school of thought, the agency’s chair—Gary Gensler—quite recently outlined a few concerns about crypto enforcement in the budget request for the following fiscal year. Alongside, he also used crypto administration as the main reason to justify the budget allocation numbers.

He supported President Joe Biden’s request to budget more than $2.1 billion for the SEC in FY2023, allowing the regulatory body to increase its enforcement division staff. Gensler went on to refer to the crypto markets as “highly volatile and speculative.” He, in fact, also addressed the need for “new tools and expertise” to cater to enforcement.

The chair’s testimony went on to highlight,

The additional staff will provide the Division with more capacity to investigate misconduct and accelerate enforcement actions. It also will strengthen our litigation support, bolster the capabilities of the Crypto Assets and Cyber Unit, and investigate the tens of thousands of tips, complaints, and referrals we receive from the public.”

In fact, while addressing a Michigan representative at the hearing, the SEC chair re-emphasized his view that “most” offerings from token projects fall under the SEC’s regulatory purview as securities and should be registered accordingly.

He said,

“We’ll use our enforcement tools to bring enforcement actions [against crypto trading platforms], but I prefer if they come in… We’re not trying to grow really significantly, but resources to grow at least six percent to grow our enforcement arm in this space.”

CTFC chair on the same page

Well, the recent set of events that’ve taken place in the crypto space has triggered a host of regulators. Quite recently, CTFC’s Chairman Rostin Behnam expressed his concern with respect to the rise in the number of digital asset fraud and alleged market manipulation cases. In fact, he went on to request people to advocate and support regulatory obligations that would make the markets more transparent, safer, and resilient.