U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler continues to call for greater oversight of digital currency companies. In his testimony before Congress, Gensler cited the need to provide more investor protections as the rationale for the SEC’s budget hike for fiscal year 2023.
Gensler told the House Appropriation Committee that the digital currency industry poses new challenges for the SEC with its rapid expansion. The industry has grown tenfold in less than five years, and so have the risks it poses to consumer protection, he said.
His written remarks also reiterated that, noting that market volatility has underscored the need for greater consumer protection in just the past few weeks. The SEC’s increased budget will help it bolster its digital currency enforcement team to keep up with industry growth.
“The additional staff will provide the Division with more capacity to investigate misconduct and expedite enforcement actions. It will also 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,” he said.
Gensler also claimed that he considers many digital currencies to be securities that fall under the oversight of the regulator. He expressed the same sentiment on several occasions, urging digital currency exchanges to come in and “register” with the SEC.
Earlier this month, the SEC created the Crypto Assets and Cyber Unit by renaming its Cyber Unit. The strength of the unit has also increased from 20 to 50 people.
The SEC’s approach to the industry continues to receive criticism
The SEC has had success in its enforcement actions against digital currency companies. This year, it reached a $100 million settlement with digital currency lender BlockFi over failure to register its offerings.
The settlement also introduced terms under which BlockFi will continue its services that are likely to apply to similar digital currency lenders. But not all was successful as the commission’s affair with Ripple continues to drag on.
The industry has also decried the SEC’s approach to the industry in general. Digital currency proponents, including SEC Commissioner Hester Pierce, have described the approach as regulation by enforcement.
According to a recent Reuters report, Peirce reiterated this point while warning the industry that the commission may soon pass regulations that will harm the stablecoin market.
Watch: SEC Commissioner Hester Peirce on Bitcoin Association Blockchain Policy Issues
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