The Securities and Exchange Commission (SEC) announced on Thursday that it is reorganizing its enforcement efforts, replacing a unit primarily focused on fraudulent cryptocurrency offerings with a new team designed to address a broader range of cyber-related threats.
The newly established Cyber and Emerging Technologies Unit (CETU) will tackle fraud committed through various means, including artificial intelligence, social media manipulation, activities on the dark web, blockchain technology exploitation, hacking, and account takeovers, according to an SEC news release. This shift marks a strategic evolution from the Crypto Assets and Cyber Unit, which originated during the Trump administration and expanded to around 50 staff members under the Biden administration.
The CETU will be staffed by approximately 30 individuals, a reduction from its predecessor. This move aligns with perspectives suggesting a decreased emphasis on policing the cryptocurrency industry. Under the previous SEC Chairman, Gary Gensler, the agency was known for highlighting its enforcement actions against digital asset fraud.
Laura D’Allaird, previously a co-leader of the crypto assets unit, will lead the CETU. Acting SEC Chairman Mark Uyeda stated, “The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow. It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.” The CETU’s responsibilities will complement the work of a Crypto Task Force, created on January 25, showcasing what the SEC has termed a “Crypto 2.0” approach, aimed at developing a comprehensive regulatory framework for crypto assets.
According to the SEC, the new unit “will utilize the staff’s substantial fintech and cyber-related experience to combat misconduct.”
