Crypto and cyber unit at SEC gears up for staff exodus, warns Gasparino

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11th February 2024 – (New York) The crypto assets and cyber division of the U.S. Securities and Exchange Commission (SEC) is reportedly facing an imminent exodus of seasoned enforcement attorneys. According to Charles Gasparino, a correspondent for Fox Business, a growing number of resumes from current SEC staff members suggest a significant wave of departures.

Gasparino disclosed this information on February 9, cautioning that the SEC’s crypto and cyber unit is at risk of losing valuable expertise and talent. Although the identities of the individuals seeking to leave have been withheld to ensure privacy, major law firms have confirmed the circulation of these resumes.

These departures come at a time when dissatisfaction is brewing within the crypto industry regarding the agency’s chair, Gary Gensler, whom critics perceive as excessively stringent in his oversight of companies. The SEC, under Gensler’s leadership, has requested a record-breaking budget of $2.4 billion for the year, with a portion allocated to reinforcing the crypto assets and cyber unit. This move aims to bolster the SEC’s authority and regulation within the dynamic and complex crypto market.

However, the agency’s regulatory approach has faced significant pushback, especially within the decentralized finance (DeFi) sector, where traditional securities laws are challenging to apply. The departure of experienced staff members from the crypto and cyber unit adds further uncertainty and raises questions about the unit’s future effectiveness and impartiality.

The upcoming U.S. presidential election further adds to the uncertainty surrounding the SEC’s leadership. Analysts speculate that if President Joe Biden secures a second term, Gensler’s chairmanship could extend until 2026, whereas a victory for Republican candidate Donald Trump would likely result in a shift in the SEC’s direction.