How does the Department of Government Efficiency (DOGE) affect the internal operations of the SEC?

Against the backdrop of the ever-intertwined era of technology and politics, the Department of Government Efficiency (DOGE) founded by Musk emerged. Its establishment aims to deal with the long-standing problems of bureaucracy, spending waste and other confusions in the US government. It aims to simplify government processes and reduce unnecessary expenses as its mission, and strives to build a more efficient government operation system. This emerging force quickly focused on the internal operations of the SEC.

In 1934, after the Wall Street stock market crash and the Great Depression in 1929, the SEC came into being to rebuild public trust in the financial market. As an independent agency of the US federal government, it shoulders the important tasks of regulating the securities market, protecting investors, and promoting capital formation.

In daily operations, the SEC requires listed companies to regularly disclose financial reports, supervise stock exchanges, brokers, etc., crack down on illegal activities such as insider trading, and impose fines, litigation and other penalties on violators.

The conflict between Musk and the SEC can be called "frozen three feet, not a day's cold." In 2018, Musk's tweet "Tesla has privatized and funds are in place" instantly disrupted the capital market, and Tesla's stock price fluctuated sharply. The SEC quickly attacked, accusing him of misleading investors, and Musk eventually paid a $20 million fine and resigned as Tesla chairman.

When acquiring Twitter in 2022, Musk was sued for securities trading violations by the SEC for failing to disclose a large amount of Twitter stocks in a timely manner. The SEC said he paid more than $150 million less while Musk insisted it was an administrative mistake.

On February 18, local time, DOGE posted on social platform X, publicly soliciting clues about SEC waste, fraud and abuse problems, and instantly received more than 12 million views. This action has attracted widespread attention, and Musk responded to support with a smiley face. DOGE's motives may be to cut federal spending, simplify regulatory processes, and there is also the possibility of retaliation for viewing the SEC.

The cryptocurrency industry generally welcomes the DOGE survey SEC. Cardano founder Charles Hoskinson shared a "so happy" GIF to express excitement after DOGE announced the investigation. Ripple Chief Legal Officer Stewart Aldroty urged DOGE to review SEC spending, accusing SEC of wasting taxpayer money and regulating like “burning houses and killing rats.”

Some people in the financial industry are concerned that the DOGE survey will weaken the independence and authority of the SEC. Bank of England Governor Bailey once pointed out that weakening regulatory independence will undermine financial market reforms. Some Wall Street financial institutions are also worried that the regulatory intensity may be relaxed after the SEC is investigated, increasing market risks.

Ordinary investors have different opinions. Investors who are optimistic about DOGE expect the investigation to bring more reasonable supervision and promote the development of the crypto market; prudent investors are worried that the escalation of the conflict between DOGE and SEC will cause turmoil in the financial market and affect investment returns.

DOGE's review may prompt the SEC to carry out internal reforms. At the management level, optimize the internal structure, reduce cumbersome levels, and make decisions more efficient. In the law enforcement process, the case handling steps may be simplified, the investigation cycle may be shortened, and the law enforcement efficiency may be improved. In terms of resource allocation, manpower and material resources should be allocated more reasonably and focused on cracking down on major financial violations.

The impact of DOGE on SEC may also be reflected in the adjustment of regulatory policies. In the cryptocurrency space, the SEC had previously tended to treat most tokens as securities for strict regulation, such as lawsuits against Ripple's XRP token. However, under DOGE's review, regulatory thinking may shift to more flexible and pragmatic, and some tokens may be reclassified as commodities.

In the securities market, SEC may optimize regulatory rules to reduce corporate compliance costs and encourage innovation and capital inflows. For example, simplify the listing process of small enterprises and provide convenience for the development of emerging enterprises.

DOGE investigates the SEC path is full of thorns. When obtaining critical data, the SEC may set up numerous obstacles for information security and internal management considerations, making it difficult for DOGE to fully understand the actual operation. DOGE has limited power, and if the SEC does not cooperate, the investigation progress is easily hindered.

The investigation also faces resistance from within and beyond the SEC. SEC insiders may resist because of concerns about damage to their own interests, and some political forces may also be secretly hindering them in order to maintain the existing regulatory landscape.

Future results are full of uncertainty. Whether DOGE can break through many obstacles, discover substantive problems of SEC and promote effective change remains to be tested by time.