US SEC Wants to Hire Crypto Experts But Wants Them to Sell Their Crypto First

The United States Securities and Exchange Commission (SEC) is looking to hire cryptocurrency experts but wants them to sell their crypto asset holdings first, according to a recent report from the SEC’s Office of the Inspector General (OIG).

As part of the SEC’s ethics rules, employees are prohibited from holding investments in areas the agency regulates.

Experts Unwilling to Divest Crypto Asset Holdings 

In a report on SEC’s Management and Performance Challenges, the OIG cited the ethics rules as a major barrier to recruitment, as many qualified candidates hold crypto assets and are reluctant to offload them.

“Many qualified candidates hold crypto assets, which the Office of the Ethics Counsel has determined would prohibit them from working on particular matters affecting or involving crypto assets. This proibition, according to SEC officials, has been detrimental to recruiting, as candidates are often unwilling to divest their crypto assets to work for the SEC,” the OIG said.

On the other hand, officials in several other SEC divisions cited a small candidate pool of qualified experts and high competition from private sector recruitment as challenges in hiring crypto talents.

Meanwhile, the difficulty in hiring crypto experts could be seen as a major disadvantage to the SEC, which has been struggling to regulate crypto. As stated in the report, recruiting crypto specialists is critical to strengthening the SEC’s capabilities in investigating new and emerging issues in the crypto sector.

Regulator for Crypto?

While the SEC has severally publicized itself as the primary regulator for crypto, the agency has yet to set clear guidelines for the asset class and entities operating within the sector.

In recent years, the agency has been criticized for having taken a “regulation by enforcement” approach in regulating the sector instead of setting a clear regulatory framework to follow.

In June, the SEC sued cryptocurrency exchange Coinbase on claims that its staking-as-a-service program constituted an unregistered securities sale. Coinbase denied the claims, arguing that it does not offer securities and that its crypto asset offerings are not within the agency’s jurisdiction.