{"id":7145,"date":"2022-05-15T21:14:16","date_gmt":"2022-05-15T21:14:16","guid":{"rendered":"https:\/\/www.sygna.io\/?p=7145"},"modified":"2022-05-30T21:40:52","modified_gmt":"2022-05-30T21:40:52","slug":"sec-to-double-staff-in-crypto-unit","status":"publish","type":"post","link":"https:\/\/www.sygna.io\/jp\/blog\/sec-to-double-staff-in-crypto-unit\/","title":{"rendered":"US&#8217; SEC to Double Staff in Crypto Unit, Increase Industry Scrutiny"},"content":{"rendered":"\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>The U.S.&#8217;  Securities and Exchange Commission (SEC), <a href=\"https:\/\/www.cnbc.com\/2022\/05\/03\/sec-adds-to-cryptocurrency-regulation-staff.html\">announced<\/a> on May 3 that it would double the size of its staff in its Crypto Assets and Cyber Team, which will jump from 30 to 50 full-time employees.<\/p>\n\n\n\n<p>The announcement comes as crypto markets have entered a downturn that many fear will be prolonged following the exacerbating multi-billion collapse of the Terra (LUNA) <a href=\"https:\/\/www.wsj.com\/articles\/why-did-cryptocurrencies-terrausd-and-luna-unravel-stablecoin-price-crash-explained-11652462779\">TerraUSD<\/a> algorithmic stablecoin, more expected Federal Reserve rate hikes in the battle against inflation, as well as increased global instability amid the Russian quagmire in Ukraine.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" src=\"https:\/\/upload.wikimedia.org\/wikipedia\/commons\/thumb\/0\/0a\/GaryGenslerSEC.jpg\/453px-GaryGenslerSEC.jpg\" alt=\"\"\/><figcaption>Source: Wikimedia Commons<\/figcaption><\/figure><\/div>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"sec-too-understaffed-to-police-crypto\">SEC too Understaffed to Police Crypto<\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>SEC Chair <a href=\"https:\/\/www.sygna.io\/blog\/sec-gary-gensler-defi-regulation\/\">Gary Gensler<\/a> said the new positions will be filled by a combination of investigative attorneys, trial lawyers, and analysts specializing in fraud. He touted the SEC\u2019s dozens of successful prosecutions against crypto entities and emphasized that the new hires will allow the agency to more thoroughly police the industry, in particular with regard to identity disclosure and <a href=\"https:\/\/www.sygna.io\/blog\/us-treasury-targets-exchanges-to-counter-ransomware-threat\/\">cybersecurity<\/a>.<\/p>\n\n\n\n<p>The hiring spree comes eight months after Gensler complained that his office was too understaffed to handle the massive uptick in crypto-related criminal activity and the evolving technology that accompanied it.&nbsp;<\/p>\n\n\n\n<p>While it\u2019s highly likely the increase in staffing will lead to more prosecutions and convictions, the addition of 20 people will still see the agency struggling to keep up. Blockchain analysis firm Chainalysis <a href=\"https:\/\/go.chainalysis.com\/2021-Crypto-Crime-Report.html\">reported<\/a> over $14 billion in illicit crypto movements last year \u2013 a 79% jump from the previous year \u2013 and there is every reason to believe that number will continue to rise.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"gensler-claims-crypto-firmly-on-sec-turf\">Gensler Claims Crypto Firmly on SEC Turf<\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>Gensler has <a href=\"https:\/\/techcrunch.com\/2022\/05\/11\/sec-securities-and-exchange-commission-gary-gensler-takes-aim-crypto-exchanges\/\">emphasized<\/a> that retail investors are the primary victims of fraud when it comes to crypto, and he has reiterated that it is within his agency\u2019s remit to go after anything that fits the definition of a security based on the Howey Test, which he considers most crypto projects to fit.<\/p>\n\n\n\n<p>\u201cMost crypto tokens involve a group of entrepreneurs raising money from the public in anticipation of profits \u2014 the hallmark of an investment contract or a security under our jurisdiction,\u201d Gensler said. He added that not many crypto assets could be compared to digital gold, which would put them under the jurisdiction of the Commodities Futures Trading Commission. Instead, he said, most fall under the demesne of the <a href=\"https:\/\/www.sygna.io\/blog\/united-states-crypto-industry-and-regulators-2021\/\">SEC<\/a>, pointing out that this would also apply to any derivatives where the underlying crypto asset could be considered a security.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"sec-chair-say-cexs-trading-against-customers\">SEC Chair Say CEXs Trading against Customers<\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>In an interview with Bloomberg, Gensler also indicated that he had a <a href=\"https:\/\/finance.yahoo.com\/news\/sec-chief-gensler-worries-crypto-221537972.html\">problem<\/a> with the current structuring of a lot of the centralized crypto exchanges as they currently operate. He said that platforms are \u201ctrading ahead of their customers\u201d and often \u201cmarket-marking\u201d against them. The chair went on to explain that traditional exchanges are legally obligated to separate certain functions in their organizations so as to avoid \u201cfront-running\u201d or trading in front of the customer base. It\u2019s not the first time he has made this point, as he made similar remarks last year to the Financial Services and General Government subcommittee, calling for crypto regulations comparable to those that apply on the Nasdaq stock exchange.<\/p>\n\n\n\n<p>Wall Street\u2019s top cop also called out the three biggest stablecoins by name, saying that Binance USD, USD Coin, and Tether were all closely linked to some of the biggest exchanges in crypto, such as BinanceUSD with Binance, Bitfinex with Tether, and Coinbase with USD Coin. He accused the various exchanges of being connected to the founding of the stablecoins and said that the motivations may have been related to efforts to avoid anti-money-laundering (<a href=\"https:\/\/www.sygna.io\/blog\/fincen-bank-secrecy-act-crypto-reform\/\">AML<\/a>) and know-your-customer (<a href=\"https:\/\/www.sygna.io\/blog\/what-is-aml-kyc-in-crypto\/\">KYC<\/a>) regulations.<\/p>\n\n\n\n<p>The comment takes on extra resonance in the wake of the devastating collapse of TerraUSD, which had been among the largest stablecoins until it lost its peg in mid-May and within days fell to near-zero value. In testimony before the Senate Banking Committee, US Treasury Secretary Janet Yellen has also <a href=\"https:\/\/techcrunch.com\/2022\/05\/10\/us-treasury-secretary-janet-yellen-pushes-for-stablecoin-regulation-by-end-of-year\/\">taken aim at stablecoin<\/a>s since the eruption of the crisis, saying that it would be \u201chighly appropriate\u201d to regulate the asset class by the end of the year.<\/p>\n\n\n\n<p>With the smoke now clearing and laying bare just how much financial devastation and destruction of ordinary retail investors&#8217; portfolios were caused by the <a href=\"https:\/\/ambcrypto.com\/luna-ust-postmortem-was-it-a-coordinated-attack-or-a-ponzi\/\">alleged coordinated attack<\/a> by Wall Street hedge fund giants on Terra, and the number of errors and lack of judgment committed on the side of the victims as well, the incoming regulatory changes might finally be welcomed by many in the crypto space. <\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" src=\"https:\/\/upload.wikimedia.org\/wikipedia\/commons\/thumb\/1\/19\/U.S._Securities_and_Exchange_Commission_headquarters.JPG\/746px-U.S._Securities_and_Exchange_Commission_headquarters.JPG\" alt=\"\"\/><figcaption>Source: Wikimedia Commons<\/figcaption><\/figure><\/div>\n\n\n\n<p><\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The SEC will double its Crypto Assets and Cyber Team staff, and Treasury Secretary Janet Yellen wants more regulation after the Terra crash.<\/p>\n","protected":false},"author":20,"featured_media":2272,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37,81,21,26,28],"tags":[124,126,82,100,123],"class_list":["post-7145","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-posts","category-sec","category-crypto-compliance","category-news","category-u-s-crypto-regulations","tag-regulations","tag-luna","tag-sec","tag-crypto","tag-gensler"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US&#039; 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