The United States Securities and Exchange Commission (SEC) is seeking an additional $158 million from the federal budget for the upcoming fiscal year to address the rapid growth and changes in the markets, including the unpredictable nature of the crypto markets. In its Congressional Budget Justification released on March 11, the SEC is requesting a total budget of $2.594 billion for 2025, an increase from the $2.436 billion it requested for 2024.
In the 148-page document, SEC Chair Gary Gensler emphasized the need for additional funds due to the transformative impact of technology on markets and business models. Gensler highlighted that these changes have created more opportunities for fraudulent activities, and it is crucial for the SEC to have the resources to combat bad actors effectively.
The SEC plans to allocate part of the extra funds to increase staffing across its divisions. The target number of positions for 2025 is set at 5,621, compared to 5,473 in 2024. The Division of Examinations (EXAMS), responsible for compliance checks, seeks to fund 23 additional positions to address emerging risks, particularly in crypto assets and financial technology. The Office of Investor Education and Advocacy (OIEA), which engages with retail investors, requested one more position to handle inquiries and complaints related to fraud involving crypto asset securities. The Office of the General Counsel (OGC), overseeing the SEC’s legal affairs, requires two additional positions to support the growing litigation brought against the Commission and to enhance its whistleblowing program, which has experienced a significant increase in volume.
The SEC’s performance report for 2023 indicates that it met or exceeded 28 out of 36 performance targets. It fell short of six targets and lacked sufficient data for two. These targets include the number of examinations conducted and the success rate of the SEC in lawsuits. However, the SEC did not meet its target for winning lawsuits on at least one claim in 2023.
These performance targets align with the agency’s four-year plan, set by Gensler in 2022, which focuses on protecting the public from fraud, establishing a robust legal framework, and promoting diversity within the SEC’s workforce.
In terms of crypto-related enforcement actions, the SEC reported a significant increase in litigation and administrative proceedings, reaching a total of 46 in 2023. This number more than doubled compared to 2021, the year Gensler assumed the position of chair. However, crypto-related actions accounted for less than 6% of the SEC’s total of 784 actions in 2023.
The article explores the role of SEC Chair Gary Gensler in shaping crypto regulation and whether he has the final say in decision-making.