The Securities and Exchange Commission or the SEC, has just announced its fiscal plans for 2025 as a request submission for budget to the United States Congress.
Through the proposal, SEC has requested an additional budget in 2025 to tackle scams and wrongdoings in the crypto market.
SEC Asks for Budget to Oversee The Crypto Market
SEC or Securities and Exchange Commission, is a regulatory body in the United States that oversees financial activities regarding securities based financial assets.
The regulatory body patrol over the financial market to see whether there are misconducts or illegal activities regarding the use of securities in the market.
Even though the SEC should only focus on securities based assets, it has branched out to now trying to get involved with overseeing the crypto market, without having a clear regulatory ground to stand on.
This is because the United States still has no clear regulatory settings yet regarding who should watch over the crypto market, as the debate still goes on whether the asset is considered a security or a commodity.
Because of this unclarity, the SEC still continues to chase down illicit activities in the crypto market by suing the project or product owners that are doing those activities and taking them to court.
This is the main reason why now SEC asks for more budget from the congress through the new annual fiscal report with an estimated budget needed in 2025.
In the proposal, SEC stated that it plans to increase the monitoring of illicit activities in the crypto market as there are more and more everyday in the wild west of crypto, said Gary Gensler, the head of SEC in many statements.
The request is to increase the SEC’s budget by $158 Million to increase more staff so that more positions can be filled to oversee the crypto market.
SEC is planning to increase the number of staff by around 148 people to help fill its divisions so that they could minimize the risk of investors losing money, and also handles questions and complaints related to fraud involving crypto asset securities.
Is The SEC Too Harsh on Crypto?
The staff will also be helping with monitoring other emerging technologies in the financial sector, but the primary focus will be on crypto.
This new budget has prompted a new narrative saying that Gary Gensler is too harsh on crypto without looking at the facts happening in the market.
According to Chainalysis, the number of illicit activities has dropped in 2023 from 2022, changing the pattern that illicit activities always increase every year.
The data was calculated by looking at the value of crypto received by illicit address which significantly dropped in 2023 to around $24.2 Billion, from $39.6 Billion in 2022.
Chainalysis also took a deeper look into the on-chain world where they found out that the amount of illicit funds in the crypto market only accounts for 0.34% of the overall activity.
This invalidates the need for the proposed additional budget for the SEC and the overall need to increase the monitoring of the crypto market.
The decreasing number of illicit funds and the overall market share of those funds is a representation that the market is maturing and is less prone to scams and hacks.
Even though it is still present, the need for enhanced monitoring should have been done years ago as currently the trend is going downward already.
The data from Chainalysis also support the idea that Gary Gensler is too harsh on crypto as it's not really as bad as he stated.
This subjective view from Gensler is why not many investors in the crypto market fancies him, as most investors are blaming him for hindering the adoption pace of crypto in the US.
But overall, it is still determined by the Congress if there will be enhanced monitoring of crypto in 2025 because the decision lies within their hands.
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