Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), has raised concerns about the implementation of cryptocurrencies in his budget request for the next fiscal year.
In written testimony for a Wednesday hearing of the US House Appropriations Committee, Gensler said that supported President Joe Biden’s request to budget more than $2.1 billion for the SEC in fiscal year 2023, which would allow the regulator to increase its law enforcement division by 50 people. The SEC chairman cited concerns about the cryptocurrency space, referring to markets as “highly volatile and speculative”, as well as the need for “new tools and experience” to address the application of the laws.
“The additional staff will provide the Division with more capacity to investigate misconduct and expedite enforcement actions,” Genesler said. “It will also bolster 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.”
Addressing Michigan Rep. Brenda Lawrence at the hearing, Gensler reiterated his view that “most” token project offerings fell under the purview of SEC regulation as securities and should be registered accordingly. According to the SEC chairman, investors are currently “not well protected” given the regulator’s limitations in enforcing laws:
“We will use our enforcement tools to take enforcement action [contra las plataformas de trading de criptomonedas]but I prefer that they arrive […] We’re not trying to grow really significantly, but rather have the resources grow at least 6 percent to grow our enforcement arm in this space.”
Gensler later added that he wanted more funds to devote to issues related to the growing cryptocurrency space, and cited between 85 and 90 legal actions that the SEC had taken against digital asset companies in the past year. He also referred to the recent price volatility of a crypto asset “that went from $50 billion in value to almost zero in just the last three weeks,” possibly referring to TerraUSD (UST).
The recent volatility among major cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), following the collapse of Terra (LUNA), has drawn the attention of more than one regulator and lawmaker in the United States.. On May 12, Treasury Secretary Janet Yellen addressed the House Financial Services Committee, including in her testimony that de-pegging TerraUSD (UST) and Tether (USDT) from the US dollar was not a “real threat to financial stability” given the scale of the stablecoin market.
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