Last week it was reported that the Securities and Exchange Commission (SEC) was doubling the size of its crypto enforcement team.
The SEC also revealed that it had rebranded its Cyber Unit to the Crypto Assets and Cyber Unit to reflect its additional focus on the digital asset sector. The SEC said that its headcount for the Unit was being increased to 50 individuals. The Division of Enforcement is the SEC’s largest segment of the agency with a budget of around $680 million.
According to a statement by the SEC, the renamed Crypto Assets and Cyber Unit (formerly the Cyber Unit) will increase its headcount to 50 individuals. The SEC also outlined its ambitions in regards to digital asset transgressions:
- Crypto asset offerings;
- Crypto asset exchanges;
- Crypto asset lending and staking products;
- Decentralized finance (“DeFi”) platforms;
- Non-fungible tokens (“NFTs”);
- Stablecoins
SEC Commissioner Hester Peirce, well known for her support of thoughtful Fintech innovation, posed the question via Twitter as to why the SEC is leading with enforcement in crypto, when they are a regulatory agency with an enforcement division and not an enforcement agency first.
The SEC is a regulatory agency with an enforcement division, not an enforcement agency. Why are we leading with enforcement in crypto?
— Hester Peirce (@HesterPeirce) May 3, 2022
Asked if she was participating in the White House’s Digital Asset working group, Commission Peirce said she was not.
The Secretary of the Treasury is currently working with all relevant agencies to produce a report on the future of money and payment systems, including implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future. The White has has requested that the federal government will take concrete steps to study and support technological advances in the responsible development, design, and implementation of digital asset systems while prioritizing privacy, security, and bad actors.
SEC Chairman Gary Gensler is involved with the inter-agency group, yet it seems his interests are for more enforcement and less collaboration and innovation. It appears that his ambitions are juxtaposed with the Biden Administration’s mission of promoting US leadership in technology and economic competitiveness in the global financial system.
Today, @POTUS signed an Executive Order on crypto-assets. I look forward to collaborating with colleagues across the government to achieve important public policy goals: protecting investors & consumers, guarding against illicit activity, & helping ensure financial stability.
— Gary Gensler (@GaryGensler) March 9, 2022
Some industry insiders believe the highly politicized SEC and its implicit goals of heightened investor protection even to the detriment of innovation will hobble Fintech innovation, including blockchain technology, at least in the near term.