Coinbase recently expressed its concerns regarding the SEC’s $2.6 billion budget request for the upcoming fiscal year. According to a statement provided to CryptoSlate on June 13, a representative from Coinbase highlighted that the SEC consistently asks for more money to fuel its enforcement activities, while neglecting to allocate funds towards creating clear and workable regulations for the crypto industry.
The SEC’s budget proposal includes a significant portion of $812.4 million dedicated to enforcement, a notable increase from the previous year’s budget of $675.6 million. SEC chair Gary Gensler defended the budget increase by stating that it would allow for the expansion of the Division of Enforcement by 27 full-time positions, bringing the total to 1,447. This expansion is aimed at enabling the regulator to investigate misconduct on a larger scale and pursue more complex legal actions.
Coinbase has been a vocal advocate for the SEC to shift its focus from strict enforcement actions to creating clear regulatory guidelines for the crypto industry. The exchange has consistently urged the SEC to engage in rulemaking activities and reduce its enforcement-centric approach. Despite efforts such as rulemaking petitions and legal challenges to prompt a response from the SEC, Coinbase believes that the regulator’s changing stance has only contributed to uncertainty and confusion within the industry.
The American Securities Association (ASA), an independent trade association, has also voiced its concerns over the SEC’s budget request. In a letter dated June 13, the ASA urged the Senate Appropriations Committee to provide the SEC Enforcement Division with a budget significantly lower than what was proposed by the President. The ASA recommended aligning with the House Appropriations Committee’s suggestion of a $2 billion budget for the SEC, with an enforcement division allocation of $644 million.
In addition to proposing a lower budget for the SEC, the ASA emphasized the importance of holding the SEC accountable for its actions. The trade association called for a focus on investor protection, market order and fairness, and capital formation, while also demanding restrictions on certain SEC information collection practices. The ASA further requested investigations into the regulator’s operations and mandated reporting requirements to ensure transparency and accountability.
Overall, the criticisms raised by Coinbase and the ASA underscore the ongoing tension between regulatory enforcement and industry-friendly rulemaking within the SEC. As the debate over the SEC’s budget allocation continues, it remains to be seen how the regulator will balance its enforcement priorities with the need for clear and effective regulatory guidance in the rapidly evolving crypto landscape.
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