SEC Chair Gary Gensler Is Staffing Up To Investigate The Crypto Industry

With the collapse of FTX and allegations against the company and some of its executives, regulators are cracking down on the crypto market. In my experience as a founder of an executive search firm, once the SEC has opened an investigation, other regulators will pursue their own investigations and actions.

The Securities and Exchange Commission (SEC), the main regulator of the financial and securities industry, is increasing its staff, an SEC spokesman told CoinDesk last Wednesday. The new employees will help the agency investigate, investigate, review, investigate, and potentially prosecute securities law violations related to these new crypto products and trading activities. A spokesman for the regulatory authority did not say how many new jobs would be added.

In May 2022, the SEC announced that the agency would hire 20 additional supervisors. The new employees will be part of the new Crypto Assets and Cyber ​​​​​​unit, which will grow to 50 professionals tasked with “protecting investors in the cryptocurrency market and from cyber threats.”

According to the SEC, the additional staff will include executives, investigators, fraud analysts and litigators who will focus on investigating securities law violations in the following areas: crypto asset offerings, exchanges, lending and betting products; decentralized finance platform; Irreplaceable tokens and stablecoins.

"The United States has the largest capital market because investors trust it, and as more investors get into crypto, it becomes more important to devote more resources to protecting it," SEC Chairman Gary Gensler said in a statement. . Gensler added, “The Law Enforcement Division's Crypto Assets and Cyber ​​Programs Unit has successfully brought dozens of cases against those attempting to exploit investors in the crypto market. This core unit has almost doubled in size and is identifying issues with cybersecurity disclosure and monitoring. as well as exposing wrongdoing in the crypto market. The SEC will be better equipped to prosecute activity.

Since its inception in 2017, the department has taken over 80 enforcement actions related to fraudulent and unregistered crypto wealth offerings and platforms, resulting in a total of $2 billion.

In July, Gurbir Gravel, head of SEC enforcement, asked Congress for more resources to effectively oversee and investigate the crypto industry, according to CoinDesk. Grewal asked the House Financial Services Subcommittee to allocate sufficient funds to recruit and hire an additional 125 regulators while the SEC works to track the number of digital asset investigations, bankruptcies and platform failures.

Are crypto exchanges safe and are there qualified custodians?

Last Thursday, in a prepared speech before an Investor Advisory Board meeting, Gensler addressed U.S. cryptocurrency exchanges and reiterated his position that cryptocurrency exchanges are not safe and competent custodians. Gensler said, “To be clear, just because a crypto trading platform claims to be a qualified custodian doesn't mean it is. When these platforms fail - as we've seen time and time again - investors' assets often become the property of bankrupt companies, leaving online investors in bankruptcy court. The SEC chairman tweeted about the agency's proposal to require trust companies to share funds and provide financial statements by chartered accountants.

Public Citizen, a nonpartisan, nonprofit consumer advocacy group with over 500,000 members, wrote an open letter praising Gensler for pointing out that some cryptocurrency companies issue unregistered securities and act as unregistered exchanges, brokers, or other regulated financial intermediaries .

The advocacy group claims that “cryptocurrency enthusiasts have launched a massive Ponzi scheme that disproportionately harms black people and low-income people.” The letter reads: “The cryptocurrency ball has been inflated by powerful people, many of whom are secretly paid; massive advertising campaigns funded by crypto firms misusing or stealing customer funds; And a gallery of scammers of online crypto enthusiasts, some trying to inflate the price of the token.

What does SEC mean?

The SEC claims that many digital tokens are unregistered securities. The FTX agency handles the FTT token exchange and offers products offered by multiple platforms. The regulator separately accused cryptocurrency platform Kraken of falsely offering securities as a betting service. According to the regulator, Kraken has not adequately disclosed the risks of participating in the program. The cryptocurrency platform has agreed to pay $30 million to cover costs and discontinue the product.

The SEC is also attacking international crypto exchange Binance, whose top executive Changpeng Zhao exposed the FTX scandal by threatening to sue Paxos to stop Binance from offering dollars. The regulator claims that BUSD is an unregistered security.

Regulators also questioned whether Binance's U.S. and global divisions are independent. According to The Wall Street Journal, the two appear to be closer than previously reported, allegedly "they coordinate staff and finances and share a subsidiary that buys and sells cryptocurrencies." The magazine reported that Binance may have gained access to customer data in the US because its developers in China gained access to software code belonging to Binance.US users' digital wallets.

Crypto executives in trouble

Crypto executives like Coinbase CEO Brian Armstrong have criticized Gensler's actions. Armstrong said on Bloomberg TV that the US is lagging behind on regulation while the rest of the world uses cryptocurrencies. According to Block, Armstrong also defended Coinbase's staking product. He called for a "clear set of rules" for crypto assets and criticized Gensler's approach to enforcement.

What does that mean?

With increased scrutiny and scrutiny from the SEC, companies will increase internal recruitment to ensure compliance with cryptocurrency laws and regulations.

Here are 10 open crypto compliance jobs:

1. Coinbase - Lead Regulatory Policy Specialist
2. Coinbase is ACH, a payment risk analyzer.
3. Cash App is a cryptocurrency regulation advisor.
4. eBay - Crypto Advisor
5. Andreessen Horowitz (a16z) - Partner 22, Compliance Specialist, Crypto
6. Zero Hash – Assistant General Counsel for regulatory affairs
7. Zero Hash – Vice President of Legal and Regulatory Affairs
8. Anchorage Digital – related to compliance testing and analytics monitoring
9. Anchorage Digital is a compliance testing and monitoring manager.
10. Poxos leads risk assessment program

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