Gary Gensler
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The Securities and Exchange Commission announced on Tuesday that it will nearly double its staff responsible for protecting investors in the cryptocurrency markets.
The regulator’s Crypto Assets and Cyber team, a unit of the SEC’s broader Enforcement Division, will increase its staff by 20 to a total of 50 dedicated positions.
Wall Street’s top law enforcement official said the 20 additions will include investigative attorneys, litigators and fraud analysts. SEC Chairman Gary Gensler and Chief Enforcement Officer Gurbir Grewal applauded the hiring as overdue and essential to regulating one of Wall Street’s newest and most popular industries.
The SEC’s crypto unit “has successfully filed dozens of lawsuits once morest those seeking to take advantage of investors in the crypto markets,” Gensler said in a statement. “By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify cybersecurity disclosure and oversight issues. »
Grewal added that individual retail investors tend to make up the bulk of victims of crypto-related securities fraud. Cyber threats continue to pose “existential” risks to the US financial system, he added.
“The strengthened Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges,” Grewal said in a statement.
The announcement comes nearly eight months following Gensler lamented to lawmakers that his agency needed more staff to handle the volume of new and complex fintech.
Gensler told Sen. Catherine Cortez Masto, D-Nev., in September that the regulator might use “a lot more people” to assess and regulate some 6,000 new digital projects.
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“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading or lending,” Gensler told the Senate Banking Committee at the time. “Frankly, right now it’s more like the Old West or the old ‘buyer beware’ world that existed before the securities laws were enacted. »
SEC officials did not respond to an email seeking comment on whether the 20 additional hires would completely satisfy the need for more staff.
Since being confirmed by the Senate to lead the SEC in April 2021, Gensler has embarked on one of the most ambitious regulatory agendas in decades.
He pushed for potential rule changes for brokers who sell client orders, more in-depth corporate climate disclosures, and much tighter oversight of the fast-growing cryptocurrency market.
While President Joe Biden and other Democrats have praised Gensler’s determined approach, Republicans have criticized his efforts as partisan and restrictive of innovation.
“When it comes to the people and companies you regulate, do you consider yourself their daddy? Late. John Kennedy, R-La., asked Gensler in September. “Why do you impose your personal preferences on cultural issues and social issues on companies, and therefore on their customers and workers?
Gensler said investors themselves want more clarity from companies regarding the risks they face due to climate change and bad actors looking to steal digital assets.
