SEC Chief Calls Crypto Markets “Wild West,” Wants $109M to Help Rein Them In

Updated: 20 July 2023

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Securities and Exchange Commission (SEC) Chair Gary Gensler said the cryptocurrency industry is the ”wild west” and requested an additional $109 million in funding to rein it in.

Gensler made the remarks yesterday in prepared testimony before the U.S. Senate Appropriations Committee’s Subcommittee on Financial Services and General Government. He requested additional funds for the SEC that would increase its overall budget to $1.4 billion.

He also expressed support for the Biden administration’s proposal to increase the SEC’s budget, citing the urgent need for “new tools, expertise, and resources” to address the noncompliance issues prevailing in crypto markets.

Gensler’s Testimony and Request for Budget Increase

NEWS : SEC Chair Gensler Seeks Fresh $109 Million Funding To Regulate Crypto ‘Wild West’: Gary Gensler, the controversial US Securities and Exchange Commission Chair, recently sounded the alarm… #CryptoNews #btcusd #cryptoregulation #ethusd #GaryGensler https://t.co/Qpmh4pCHCT pic.twitter.com/69s83U9I5Z

— SYSOP.ai (@sysopai) July 20, 2023

“I am pleased to support the President’s FY 2024 request of $2.436 billion for SEC operations, to put us on a better track for the future,” he said. “The bulk of the increase would be to support currently authorized staffing levels given inflation.”

SEC Says Potential for Wrongdoing in Crypto Has Increased

Gensler’s repeated comparison of the crypto markets to the “Wild West” highlights the sector’s lack of regulation and oversight. He warned that investors have been exposed to significant risks in this speculative asset class due to the absence of robust regulatory measures.

He added that with the continuous growth and rapid changes in the crypto space, the potential for wrongdoing by bad actors has increased. As the leading regulatory authority, Gensler emphasized the importance of the SEC being equipped to combat illicit crypto activities and protect investors.

This is not the first time Gensler has spoken about the challenges of the crypto market. In September 2021, he testified before the Senate Banking Committee, drawing parallels between the crypto industry and the “wild west,” stressing the need for comprehensive regulations.

“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” he said. “Frankly, at this time, it’s more like the Wild West or the old world of “buyer beware” that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications”

Gensler has advocated for better collaboration between federal agencies and urged Congress to consider legislation to clarify their regulatory powers over the crypto sector.

SEC’s Enlarged Workforce to Combat Misconduct

In his budget request, Gensler plans to expand the SEC’s workforce significantly. He aims to increase the number of full-time positions from 4,685 in 2023 to 5,139 in 2024. This move is deemed necessary to tackle the rapidly growing misconduct in the crypto space, driven by technological innovation.

“The additional staff will provide the Division with more capacity to meet these challenges, investigate misconduct on a larger scale, and accelerate the pace of enforcement investigations to resolution,” he said.

He added that this year’s budget request aims to expand the team and bring the Division’s size to just 4 percent more than it was in FY 2016.

Gary Gensler, the SEC Chair, spoke to U.S. lawmakers during a hearing on July 19 | Appropriations Committee live stream

Gensler’s latest call for additional resources and regulatory measures highlights his position that there is a pressing need to address the challenges posed by the crypto markets