Coinbase, a prominent cryptocurrency exchange, has raised objections to the US Securities and Exchange Commission's (SEC) budget request of $2.6 billion for the fiscal year 2025. The exchange's criticism is centered on what it perceives as the SEC's prioritization of enforcement over regulatory clarity in the crypto sector.

In a statement to CryptoSlate on June 13, a Coinbase representative expressed frustration, stating, "Yet again the SEC asks for more money that will go to regulation by enforcement when it has used none of its massive budget for real crypto rulemaking that would actually foster regulatory clarity."

The SEC's proposed budget includes a substantial allocation of $812.4 million for enforcement activities, marking an increase from $675.6 million allocated in 2024. SEC Chair Gary Gensler justified this increase, noting it will expand the Division of Enforcement by 27 full-time equivalent (FTE) positions to 1,447, allowing the SEC to handle larger-scale investigations and more complex legal cases.

Coinbase has been vocal in urging the SEC to shift away from its enforcement-heavy approach and focus instead on creating clear and workable regulations. The exchange has utilized rulemaking petitions and legal challenges to push for a response from the SEC, criticizing the regulator's actions for creating uncertainty rather than clarity in the regulatory landscape.

The American Securities Association (ASA), an independent trade association, has also voiced concerns over the SEC's budget request. In a letter dated June 13, the ASA urged the US government to allocate a lower budget to the SEC, aligning more closely with the House Appropriations Committee's suggestion of limiting the SEC's budget to $2 billion for fiscal year 2025. Specifically, the ASA recommended capping the Enforcement Division's budget at $644 million.

Furthermore, the ASA called for increased accountability measures for the SEC, emphasizing the importance of focusing on investor protection, market fairness, and capital formation. The trade association criticized the SEC's handling of various regulatory matters and requested congressional oversight to ensure compliance with constitutional and legal constraints.

While the ASA's concerns extend beyond cryptocurrency issues, it highlighted a mishandled case involving a crypto firm, DEBT Box, urging Congress to hold the SEC accountable for its actions in this regard. The trade association's stance reflects broader industry concerns about regulatory overreach and the need for a balanced approach that supports innovation while safeguarding investor interests.