Coinbase vs. SEC: Crypto Clash Erupts Over $2.6 Billion Budget Request

The U.S. Securities and Exchange Commission’s (SEC) proposed budget for the 2025 fiscal year has sparked controversy, with major cryptocurrency exchange Coinbase and the American Securities Association (ASA) taking issue with the size and allocation of the requested funds.

The SEC’s budget request of $2.6 billion represents a significant increase, particularly in the Division of Enforcement, which is slated to receive $812.4 million, up from $675.6 million in the previous year. This planned expansion includes 27 additional full-time equivalent (FTE) positions, bolstering the division’s capacity to “investigate misconduct on a larger scale” as stated by SEC Chair Gary Gensler.

Coinbase, a leading cryptocurrency exchange, strongly objects to the proposed budget. Their primary concern lies in the SEC’s focus on enforcement through increased resources, rather than establishing clear regulations through rulemaking. The exchange argues that this approach fosters uncertainty within the industry, hindering innovation and growth.

“Yet again the SEC asks for more money that will go to regulation by enforcement,” stated a Coinbase representative to CryptoSlate. They emphasize the need for “real crypto rulemaking” that provides a framework for the industry to operate within.

Coinbase is not alone in its opposition. The ASA, an independent trade association, has also voiced its concerns. In a letter to the Senate Appropriations Committee, the ASA urges for a significantly lower budget for the SEC, echoing the House Appropriations Committee’s suggestion of $2 billion with a $644 million allocation for Enforcement.

The ASA goes further, calling for increased congressional oversight of the SEC. Their concerns extend beyond the proposed budget, raising questions about the regulator’s adherence to legal principles and its overall effectiveness in protecting investors and promoting fair markets.

Also Read: Crypto Just Got Hungrier: DevourGO Now Accepts Payments via Coinbase Commerce

The DEBT Box case, a mishandled SEC enforcement action involving a crypto firm, exemplifies the ASA’s concerns. They advocate for a probe into the incident and advocate for mandatory reports to ensure greater transparency within the SEC.

The clash between industry players and the SEC regarding the budget highlights the ongoing debate surrounding cryptocurrency regulation in the United States. While the SEC seeks additional resources to police the evolving market, some argue for a more collaborative approach that prioritizes clear rules over enforcement actions. Only time will tell how this budgetary battle unfolds and how it will ultimately impact the future of cryptocurrency regulation.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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