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SEC Wants More Money, Staff for Crypto as Congress Pushes for Comprehensive Regs

20 July 2022

The head of the SEC’s enforcement unit is asking Congress today for more resources and people to spin up the agency’s crypto regulation unit.

"During a hearing Tuesday, SEC Director of Enforcement Gurbir Grewal told the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets — which oversees the SEC’s enforcement efforts — there have been so many more enforcement actions against crypto companies they are straining the regulator’s nascent crypto unit."

"In May, the SEC nearly doubled the size of its Crypto Assets and Cyber Unit to 50 employees, adding 20 new positions including attorneys, investigators and fraud analysts to its Washington, D.C., headquarters. But as the agency continues to ramp up its efforts to police the crypto industry — and the industry is hit with a wave of high-profile bankruptcies — Grewal says he needs more staff."

Longer-term they want an additional 125 hires.

This came on the same day that Senator Kirsten Gillibrand spoke at Bloomberg’s 2022 Crypto Summit, saying the bill she introduced to Congress, the Gillibrand-Lummis digital asset bill, is all the more urgent given chaos in the market earlier this summer.

"There’s more urgency now, and also more of a sense that this is something we need to do,"" Gillibrand said. The New York Democrat made the comments at Bloomberg’s 2022 Crypto Summit on Tuesday morning.

Completing the trifecta, the Chair of the SEC told Bloomberg TV today that he is deeply concerned that the broader crypto industry sees a “lot of noncompliance” and that they are planning to increase enforcement as they develop a regulatory framework.

It’s not going without pushback.

A congressional member of the House Oversight Reform Committee, Rep. Tom Emmerson, went so far today as to charge that “Under Chair Gensler, the SEC has become a power-hungry regulator, politicizing enforcement, baiting companies to ‘come in and talk’ to the Commission, then hitting them with enforcement actions, discouraging good-faith cooperation” — particularly companies in the digital asset space.

The government wants to gear up regulations, but we think it’s a fool’s crusade.