Coinbase recently voiced its objections to the Securities and Exchange Commission (SEC)’s $2.6 billion budget request for the 2025 fiscal year. A representative from Coinbase criticized the allocation of funds towards enforcement, stating that it fails to prioritize real crypto rulemaking which would provide much-needed regulatory clarity.
The SEC’s budget request includes a significant increase in enforcement funding, with $812.4 million earmarked for this purpose in comparison to $675.6 million in 2024. SEC Chair Gary Gensler defended the budget increase, citing the need to expand the Division of Enforcement to investigate misconduct on a larger scale and handle more complex lawsuits.
Coinbase has been advocating for a shift away from the SEC’s heavy enforcement approach towards creating clear and workable regulations. The exchange has made several attempts, including rulemaking petitions and legal actions, to push the SEC towards providing much-needed regulatory clarity for the crypto industry.
In addition to Coinbase, the American Securities Association (ASA) has also raised concerns about the SEC’s budget request. The trade association recommended that the Senate Appropriations Committee provide the Enforcement Division with a lower level of funding than what was proposed by the President.
The ASA emphasized the need for greater accountability and oversight of the SEC’s actions. They called for a focus on investor protection, market order and fairness, and capital formation. Additionally, the trade association demanded restrictions on certain information collection practices by the SEC and called for mandatory reports to ensure transparency.
While the ASA’s concerns are broader than just crypto-related issues, they highlighted a specific case involving a mishandled situation with crypto firm DEBT Box. This incident underscored the importance of holding the SEC accountable and ensuring that they adhere to constitutional and legal constraints in their regulatory actions.
The debate over the SEC’s budget request reflects broader concerns within the industry about the balance between enforcement and regulation. As stakeholders continue to push for clearer guidelines and oversight, it remains to be seen how the SEC will respond to these calls for reform.