Coinbase Challenges SEC’s $2.6 Billion Budget Request for 2025 Fiscal Year
The popular cryptocurrency exchange platform Coinbase has raised objections to the Securities and Exchange Commission’s (SEC) budget request of $2.6 billion for the upcoming fiscal year 2025.
In a statement provided to a leading crypto news outlet on June 13, a representative from Coinbase criticized the SEC’s allocation of funds towards enforcement rather than creating clear and practical regulations for the cryptocurrency industry. The spokesperson stated, “Yet again the SEC asks for more money that will go to regulation by enforcement when it has used none of its massive budget for real crypto rulemaking that would actually foster regulatory clarity.”
The SEC’s proposed budget includes a significant increase in funding for enforcement, with $812.4 million earmarked for that purpose, up from $675.6 million in the previous year. SEC Chair Gary Gensler emphasized that this budget would allow for the expansion of the Division of Enforcement by adding 27 full-time equivalent positions, bringing the total to 1,447. This move is aimed at enabling the regulator to investigate misconduct on a larger scale and pursue more complex legal actions.
Coinbase has been vocal in its calls for the SEC to shift its focus from enforcement to creating comprehensive regulatory frameworks through rulemaking procedures. The exchange has submitted petitions and legal challenges in an effort to push the SEC towards a more proactive approach to regulation.
Meanwhile, the American Securities Association (ASA), an independent trade association, has also stepped in to voice concerns over the SEC’s budget request. In a letter sent on June 13, the ASA urged the US government to provide the SEC with a lower budget than what was proposed. The association recommended that the Senate Appropriations Committee limit the SEC’s budget to $2 billion for the fiscal year and set the Enforcement Division’s budget at $644 million, aligning with the House Appropriations Committee’s suggestions.
Additionally, the ASA called for greater oversight of the SEC’s operations, demanding more focus on investor protection, market order fairness, and capital formation. The association highlighted a case involving a crypto firm, DEBT Box, where the SEC’s actions were called into question. The ASA emphasized the need for accountability and transparency within the regulator’s offices.
While the concerns raised by Coinbase and ASA are not solely related to cryptocurrencies, they underscore a growing demand for a more balanced and transparent regulatory approach from the SEC. The cryptocurrency industry continues to navigate a complex and evolving regulatory landscape, urging regulators to strike a balance between enforcement and fostering innovation.
