I have to say I almost always get a chuckle when I see news pop up like I saw a few days ago talking about how the U.S. Government Accountability Office or GAO had finalized and issued a report concerning the SEC and its role in crypto. You can only laugh when you find out that the SEC was sent the GAO report on December 15 but it was not made public till January 16 and the ETFs were approved on January 10. Looking at this as a whole I am just speechless because for so long the SEC stalled these ETF decisions for no reason then when they have a reason instead of jumping at the chance they blow it off and pretend like it did not happen!

So what was in this report from the GAO and what did it find?

According to the GAO, while the SEC has a dedicated wing on emerging tech this department is not well equipped to deal with the current challenges and needs specific improvement. When I read through the report and its highlights I was pretty shocked by what I read. The three main recommendations were:

• 1. The SEC chief should ensure that the chief human capital officer prepares a new workforce planning strategy aligned with the agency’s 2022–2026 strategic and performance plans.  
• 2. The SEC chief should ensure the FinHub director documents the policies and procedures supporting its internal controls.
• 3. The chair of the SEC should ensure that the FinHub director develops performance goals and measures that are objective, measurable and targeted.

For years SEC Chairman Gary Gensler has argued both for and against additional power for his agency (I know it makes as much sense to me as it does to those reading that statement) the GAO report is clear in that the SEC needs a serious overhaul. With crypto having been over $1 trillion market on and off for years I was absolutely bamboozled to read that the SEC employs a whooping 116 people who specialize in crypto assets. With billions exchanged daily, it isn't even remotely rational to think that 116 people could adequately monitor this market!

Then you have what I would call common government agency failures albeit the SEC really seems to have upped others with their failures. Workforce planning strategies are critical for agencies and departments to figure out their funding and to read that the SEC has not updated from its fiscal year 2019 - 2022 plan was stunning. We are four months into fiscal year 2024 and this plan still is not in place? Talk about incompetence at its finest by Gensler. 

If you thought that updating plans was Gensler's biggest failure with this report you would be gravely mistaken. How about how the SEC's FinHub helps coordinate the SEC oversight of emerging tech and they do not have documented policies, procedures, or performance goals. FinHub also does not have established policies or procedures to support FinHub internal controls. How does Gensler think he is going to get any sort of help when his agency isn't able to do the most basic tasks like I dunno creating procedures! 

Now if you are someone like myself who is wondering hmm how long is this going to take well GAO has launched the portal here that shows the status of the SEC addressing these recommendations! It is towards the bottom of the page and is updated as the agency (the SEC in this case) addresses or ignores the given recommendations. I cannot imagine Gensler's next trip to testify on Capital Hill will be pleasant given these egregious failures. 

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