The U.S. Securities and Exchange Commission (SEC) has submitted its 2025 budget request, signaling its intent to bolster efforts to regulate the rapidly expanding cryptocurrency sector. In the face of growing concerns over noncompliance and investor risks within crypto markets, SEC Chair Gary Gensler emphasizes the need for increased resources to effectively police these markets.

SEC Seeks More Funding to Police Crypto Sector

The U.S. Securities and Exchange Commission (SEC) has unveiled its Fiscal Year (FY) 2025 Congressional Budget Justification (CBJ), outlining its budgetary requirements for the upcoming fiscal year. This comprehensive report includes the agency’s Annual Performance Plan (APP) for FY 2025 and Annual Performance Report (APR) for FY 2023.

In the report’s executive summary, SEC Chair Gary Gensler underscores the necessity of adequate funding, stating, “I am pleased to submit the fiscal year (FY) 2025 budget request of $2.594 billion in support of 5,621 positions and 5,073 full-time equivalents. As the SEC’s funding is deficit neutral, any amount appropriated to the agency will be offset by transaction fees.”

Division Examinations and Office of Investor Education and Advocacy

The SEC’s Division of Examinations (EXAMS) is slated to receive additional resources, with a request for 23 new positions in FY 2025. This expansion aims to enhance the division’s capacity to address critical and evolving risks, including those associated with market infrastructure resiliency, cyber and information security, as well as the oversight of crypto assets and emerging technologies.

Moreover, the SEC’s Office of Investor Education and Advocacy (OIEA) has proposed adding one new position in FY 2025. This position will be dedicated to handling inquiries and complaints related to fraud involving crypto asset securities, underlining the SEC’s commitment to safeguarding investors in this burgeoning market.

Gensler’s Remarks

Chair Gary Gensler highlights the challenges posed by the unregulated nature of crypto markets, characterizing them as the “Wild West” of financial ecosystems. He stresses the prevalence of noncompliance and the associated risks faced by investors in highly speculative asset classes.

“As the cop on the beat, we must be able to meet the match of bad actors,” Gensler asserts. “Thus, it makes sense for the SEC to keep pace with the expansion and increased complexity in the capital markets.”

The SEC’s budget request for FY 2025 reflects its commitment to robust oversight and regulation of the crypto sector. With an eye towards addressing noncompliance and mitigating investor risks, the agency seeks increased funding to bolster its enforcement capabilities and safeguard the integrity of financial markets in the face of evolving technological advancements.