Gary Gensler, head of the U.S. Securities and Exchange Commission (SEC), aims to boost the enforcement team by hiring 33 additional staff members to handle emerging challenges, as indicated in the regulator's yearly budget proposal. A significant portion of recent workload growth in the department stems from the SEC's investigation of cryptocurrency enterprises like Coinbase Inc., Kraken, and Binance.

Several U.S. financial overseers have cited the surge of crypto assets to justify their recent funding requests—a routine process that often reflects the agencies' priorities more than the funds they might eventually receive. Justifying their schemes to Congress is crucial for the SEC amid criticisms from skeptical Republican legislators during the budget allocations process.

Budgetary plans at the Department of the Treasury and the Commodity Futures Trading Commission stress the necessity for improved monitoring of cryptocurrencies, with both bodies seeking additional resources to supervise the digital asset market and related spheres.

Discussing the SEC budget, Gensler's executive summary underlines the challenges of regulating the digital assets domain. He pointed out the unregulated nature of the crypto markets, fraught with noncompliance and prompting investors to risk their hard-earned funds in a speculative sector. The SEC, often accused of regulating the crypto industry solely through legal means, had already bolstered its enforcement attorneys' ranks to investigate digital assets more thoroughly. Proposed funding would further enable this enhancement. The SEC is also seeking to expand its examinations division by 23 employees to counter emerging risks, including cryptocurrency activities.

Expressing concerns about potential disruptions that decentralized finance (DeFi) might introduce to the financial sector, the securities vigilance entity aims to recruit a data scientist for its innovation wing. The evolving landscape of financial technologies, such as blockchain-based decentralized finance and AI-driven computer-assisted financial operations, calls for immediate scrutiny as they impact the financial industry.

In their funding appeal, the Commodity Futures Trading Commission (CFTC) primarily emphasized digital assets within their enforcement division's scope, citing nearly 50 legal actions against crypto firms over the past year. Noteworthy was the successful settlement with Binance, the world's largest cryptocurrency exchange, highlighting the regulator’s active stance. The CFTC underscored its response to challenges arising from the burgeoning digital asset market, ensuring that market participants under their jurisdiction comply with statutory and regulatory standards. The agency's request highlighted the growing trend of companies seeking licenses as derivatives clearing organizations for crypto products, presenting a new set of risks that necessitate increased monitoring efforts.

The CFTC plans to embark on rulemaking endeavors to integrate cryptocurrencies into data reporting for futures and options markets in the upcoming year. The agency reiterated its persistent appeals to Congress for enhanced oversight of spot markets, implying a specialized unit providing technical advice regarding draft legislation, especially concerning digital assets. Seeking to raise public awareness about various scams, including crypto-related frauds, the CFTC intends to enlist an external advertising agency to craft public service announcements.

In its 2025 budget proposal, the Treasury Department highlighted its actions in the cryptocurrency sector over the past year, soliciting a total of $17 billion. Disaggregated, $12.3 billion is allocated to the Internal Revenue Service, $2 billion to various other Treasury Department divisions, and approximately $2.5 billion to international initiatives. Various departments within the broader Treasury framework seek budgetary increments to enhance engagement with the cryptocurrency industry, encompassing entities like the Financial Stability Oversight Council, Office of Financial Research, Office of Terrorism and Financial Intelligence, Office of Foreign Assets Control, and Financial Crimes Enforcement Network.

For instance, the Treasury's Office of Financial Research aims to recruit five new personnel, three assigned to study and evaluate cryptocurrencies alongside matters like cybersecurity and hedge fund monitoring. The anti-terror financing division, comprising OFAC and FinCEN, aspires to refine its capabilities to monitor and understand crypto's potential role in illicit financial activities. Their recent efforts have focused on tackling digital asset gaps in the U.S. and global financial systems, ransomware financing, illicit finances linked to Russia, and money laundering associated with fentanyl and synthetic opioids, among other pressing issues.

Citing Deputy Treasury Secretary Wally Adeyemo's recent communication, detailing FinCEN’s investigations on the use of cryptocurrencies by the Hamas terror organization, underscores the department's commitment to combating illicit activities within the digital financial realm.

The executive branch consolidates budget proposals into a comprehensive outline depicting spending priorities, which are then subject to Congress's scrutiny, sometimes leading to alterations or rejections. However, the budgeting process can be marred by political obstructions, as evidenced in the ongoing federal budget negotiations and the looming threat of government shutdowns. Congress is presently evaluating the 2024 budget, navigating through a complex terrain marked by setbacks and temporary resolutions.