SEC Struggles to Recruit Crypto Experts Due to its Own Policies
The U.S. Securities and Exchange Commission (SEC) faces hurdles in recruiting crypto specialists due to internal policies and a strong competition from the private sector.
According to a recent agency document titled, The Inspector General’s Statement on the SEC’s Management and Performance Challenges, the SEC has been struggling to fill these specialist positions. It reveals that out of the agency’s 5,303 authorized positions, a disconcerting 491 remain unfilled. This issue has been persisting for the past four years, raising serious concerns about the SEC’s ability to effectively regulate the burgeoning cryptocurrency market.
Another considerable hurdle is the ethical rule that prevents staff from holding investments in areas they regulate. This rule has deterred many qualified professionals from considering a position at the SEC, as they are unwilling to divest their personal digital assets. This issue not only limits the pool of eligible candidates but also poses challenges in retaining specialists within the SEC.
An SEC spokesperson, however, downplayed the agency’s hiring issues, stressing on the company’s steady rate of hiring, low attrition rates, and status as a “best place to work in government”. They also underscored various accomplishments around rulemaking and tackling challenges.
The SEC plays a pivotal role in the regulation and enforcement concerning cryptocurrency firms and products. Currently, the agency has high-profile cases underway against major crypto exchanges like Binance and Coinbase, as well as other firms. Notwithstanding occasional case rulings that don’t go entirely in its favor, the SEC has achieved numerous victories and quickly reached settlements with several firms it targeted.
The agency’s efforts to regulate the crypto-asset markets are hampered further by the existing legal framework, which leaves gaps in the oversight of crypto assets that are not considered securities and certain stablecoins. “Caselaw concerning the application of the securities laws to crypto assets is limited and still developing,” the report noted, emphasizing the evolving nature of the regulatory landscape.
Furthermore, the SEC faces stiff competition from the private sector in recruiting specialists. Those with expertise in the crypto industry often find lucrative opportunities in private firms. The SEC struggles to compete with these private sector entities, both in terms of compensation and the requirement for candidates to divest their cryptocurrency assets.
To effectively oversee the rapidly growing and evolving crypto industry, the SEC must resolve these challenges. It also needs to advocate for more comprehensive legislation and interagency coordination in this dynamic regulatory landscape.