A new report from the agency’s inspector general claims that the Securities and Exchange Commission, one of the main federal regulators trying to control the cryptocurrency industry, is having problems hiring experts in the field.
The majority of federal agencies, such as the Social Security Administration and the Federal Trade Commission, have an Office of Inspector General, an independent body that monitors and reviews the agency’s operations. The division of the SEC released a report on the financial regulator’s “management and performance challenges in October” on Thursday.
Keeping up with developing technologies, such as artificial intelligence, and retaining a workforce knowledgeable about these developments are among the challenges. As per the Inspector General’s Office report, the SEC is encountering difficulties in hiring experts in the field of cryptocurrency assets, an area that Enforcement views as crucial for enhancing its capacity to look into novel and developing problems in the sector.
The study gave several reasons for the SEC’s difficulties hiring crypto specialists, including a dearth of competent candidates, competitive pressure from attractive private sector offers, and candidates’ repeated infractions of regulations that forbid cryptocurrency ownership. SEC officials claim that because candidates are frequently hesitant to give up their cryptocurrency holdings in order to work for the SEC, this prohibition has hurt recruiting.
Employees who, for example, own stock in a company are not allowed to vote on any applications that the company submits to the federal agency due to the agency’s complicated ethical regulations.
The SEC has been having trouble finding talent in the crypto space, which is not surprising given the industry-wide decline in hiring that has occurred in the last year and the regulator’s increased pursuit of crypto enforcement measures. Following the collapse of the cryptocurrency exchange FTX in November 2022, the SEC has stepped up its enforcement efforts, bringing numerous lawsuits against prominent figures and businesses of all sizes.
Due to Gemini Earn, a yield-bearing product that the SEC claimed was similar to an unregistered security, the agency filed a lawsuit against Gemini and Genesis in January. Next, SEC Chair Gary Gensler turned his attention to two more prominent figures in the cryptocurrency space: Do Kwon and Justin Sun. Both men were accused of selling securities that had not been registered. And he started a feud with Coinbase and Binance, the two largest cryptocurrency exchanges, in June.
Gensler has continued to put pressure on cryptocurrency companies, even though the criminal trial (and subsequent conviction) of FTX cofounder Sam Bankman-Fried has eclipsed the SEC’s actions over the past month. Most recently, he and the Justice Department focused on SafeMoon.
