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Securities and Exchange Commission (SEC) Chairman Gary Gensler delivered a compelling case for securing tens of millions of dollars in extra funding to support the agency's multi-billion-dollar budget during his appearance at the U.S. Senate Committee on Appropriations on Wednesday. He emphasized that the agency's expansion is essential, particularly in safeguarding investors from the rampant noncompliance prevalent in the crypto industry.
“We’ve seen the Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class,” Gensler said in his prepared remarks.
“With funding to meet the scale of our mission, we can be an even stronger advocate for the American public—investors and issuers alike,” he said.
The SEC, led by Gensler, is intensifying its efforts to combat crypto crimes and is aiming to secure an extra $72 million budget. This funding will be utilized to bring on board numerous additional full-time staff members, bolstering the agency's workforce. However, Gensler pointed out that the bipartisan bill recently approved by the committee, which allocates $2.364 billion for the SEC's fiscal year 2024, only manages to cover the current staffing levels authorized, taking inflation into account.
In 2023, the SEC had a workforce of 4,685 employees, as mentioned in Gensler's remarks. Approximately half of these employees were dedicated to enforcement and examination responsibilities. The proposed extra funding aimed to support the agency in expanding its teams by 170 positions and ensuring full-year funding for the staff members recruited in 2023. This move had the potential to raise the total number of full-time equivalent SEC employees to 5,139.
“With funding to meet the scale of our mission, we can be an even stronger advocate for the American public—investors and issuers alike,” Gensler said. “Stamping out fraud, manipulation, and abuse lowers risk in the system.”
'Where was the SEC?'
The lawmakers' inquiries during the hearing indicated a spectrum of perspectives regarding cryptocurrency and the SEC's regulatory approach toward it.
Senator John Kennedy (R-La.) passionately questioned Gensler, demanding an explanation for the SEC's failure to promptly address the purported fraud at the collapsed cryptocurrency exchange, FTX.
"Here's [former FTX CEO Sam Bankman-Fried] who did everything but buy Mount Rushmore and you weren't curious where this guy’s getting this money?” Kennedy asked. “Where was the SEC?” (Gensler noted FTX was headquartered in the Bahamas and that bringing enforcement actions takes time.)
