The United States Securities and Exchange Commission (SEC) is appealing to Congress for an additional $158 million from the federal budget in order to address the “significant growth and change” in the country’s markets, including the volatile nature of the cryptocurrency markets. The SEC’s request is outlined in its Congressional Budget Justification for the upcoming fiscal year of 2025, where it seeks a total budget of $2.594 billion, an increase from the $2.436 billion it requested for 2024.
In the 148-page document, SEC Chair Gary Gensler emphasizes the rapid transformation of technology in the markets and business models, which has led to an increased potential for fraudulent activities. Gensler states that the SEC, as the regulatory authority, must be well-equipped to combat such misconduct. To achieve this, the SEC plans to increase its staff across various divisions, targeting a total of 5,621 positions in 2025 compared to the previous year’s target of 5,473.
The SEC’s Division of Examinations (EXAMS), responsible for compliance-checking, aims to fund an additional 23 positions to strengthen its ability to address evolving risks, including those related to crypto assets and emerging financial technology. The Office of Investor Education and Advocacy (OIEA), which interacts with retail investors, requested one more position to handle inquiries and complaints specifically related to fraud involving crypto asset securities. The Office of the General Counsel (OGC), overseeing the SEC’s legal affairs, expressed the need for two additional positions to manage the increasing civil and administrative litigation against the Commission, as well as to support the heightened volume of its whistleblowing program.
In its performance report for 2023, the SEC claims to have met or exceeded 28 out of 36 performance targets. These targets include the number of examinations conducted and the success rate of lawsuits filed by the SEC. However, the SEC fell short on six targets and lacked sufficient data for two others. The performance targets align with the three goals set by Gensler in 2022 for the agency’s four-year plan, which focus on protecting the public against fraud, establishing an effective legal framework, and promoting workforce diversity.
In terms of crypto-related enforcement actions, the SEC saw a significant increase, with 46 litigations or administrative proceedings in 2023, more than double the number when Gensler assumed the role of chair in 2021. However, these actions accounted for less than 6% of the SEC’s total of 784 actions that year.
Overall, the SEC’s request for increased funding reflects the need to adapt to the changing market landscape and effectively regulate the growing presence of cryptocurrencies.