The Securities and Exchange Commission, a key player in regulating the crypto industry, is facing challenges in recruiting experts in the field, as highlighted in a recent report by the agency's inspector general.
In its October report on the financial regulator's "management and performance challenges," the SEC's division outlined obstacles such as adapting to evolving technologies like AI and the need for a knowledgeable workforce. The report emphasized the agency's struggle in recruiting specialists in crypto assets, a crucial aspect for enhancing its capabilities in investigating new developments in crypto-asset markets.
The challenges stem from a limited pool of qualified candidates, strong competition from the private sector with attractive offers, and potential conflicts with rules prohibiting candidates from holding cryptocurrencies. The report pointed out that the prohibition has been a deterrent for potential recruits who are reluctant to divest their crypto assets to work for the SEC.
Despite the complexities arising from existing ethics rules, which restrict employees with equity holdings in a company from making decisions regarding the company's applications to the regulator, the SEC faces difficulties in attracting talent in the crypto space. This comes at a time when the industry is experiencing a broader hiring downturn, and the SEC has intensified its enforcement actions in the crypto space over the past year.
Following the collapse of the crypto exchange FTX in November 2022, the SEC has increased its enforcement efforts, filing lawsuits against various companies and personalities. From suing Gemini and Genesis for their Gemini Earn program to charging figures like Justin Sun and Do Kwon for selling unregistered securities, SEC Chair Gary Gensler has been actively pursuing enforcement actions. The agency has also taken on major crypto exchanges such as Binance and Coinbase.
Despite recent developments, including the conviction of FTX cofounder Sam Bankman-Fried, the SEC has maintained a strong stance in enforcing regulations within the crypto industry. The agency's commitment to addressing challenges and its overall performance were acknowledged in the Inspector General report, highlighting its steady hiring rate, recognition as a best place to work in government, and successful completion of mandated rulemakings.