According to a report from Fortune, the United States Securities and Exchange Commission (SEC), one of the major federal regulators seeking to get a grip on the crypto industry, is running into a rough patch hiring crypto experts, according to a report from the agency's inspector general.
Most federal agencies have an Office of Inspector General, or independent authority that reviews and oversees the operations of, say, the Federal Trade Commission or the Social Security Administration. On November 2nd the SEC's division published a report on the financial regulator's "management and performance challenges".
These challenges referenced in the report include staying in step with developing technologies, like artificial intelligence, as well as sustaining an in-the-know workforce. "The SEC also faces challenges in recruiting specialists in crypto assets, which Enforcement considers critical to strengthening its capabilities to investigate new and emerging issues in crypto-asset markets," wrote the Inspector
General's Office.
The SEC expressed its difficulty recruiting crypto experts, citing a "small candidate pool of qualified experts," competing with enticing proposals from the private sector, and candidates' repeated conflicts with rules that forbid the holding of cryptocurrencies. "This prohibition, according to SEC officials, has been detrimental to recruiting, as candidates are often unwilling to divest their crypto assets to work for the SEC," read the report.
The SEC previously established complex ethics rules that forbid employees who, for example, hold equity in a company from deciding on any applications that the company submits to the regulator.
The SEC's hardships with acquiring crypto talent come in the midst of a broader hiring slowdown in the industry as well as the agency's revving up of crypto enforcement action in the past year. Since the demise of cryptocurrency exchange FTX in November 2022, the SEC has increased its commitment to enforcement actions, filing numerous lawsuits against companies and personalities, both renowned and little known.
In January, the SEC sued Gemini and Genesis for their Gemini Earn program, a yield-bearing product that the SEC alleged was similar to an unregistered security. Then, Gary Gensler, the SEC chair, targeted more prominent entities in crypto: Justin Sun and Do Kwon, who both were charged with selling unregistered securities. In June, he went after two of
the largest cryptocurrency exchanges,
While the criminal trial and conviction of FTX co-founder Sam Bankman-Fried has taken the attention off of the SEC's actions over the past month, Gensler has still been in constant judicial pursuit of crypto companies. He most recently set his sights, along with the Justice Department, on SafeMoon.
"We’re pleased that the Office of the Inspector General reported that the SEC maintained a steady rate of hiring, remained a best place to work in government, slowed attrition below government averages, completed a substantial number of rulemakings, including those mandated by Congress, and took steps to address challenges that it previously identified," said a spokesperson in reference to the Inspector General report.
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