Key Takeaways:
- 20 additional positions are to be added by the SEC to the Crypto Assets and Cyber Unit
- The newly created staff positions would include trial counsels, fraud analysts, and investigative attorneys.
- The expanded Unit will mainly focus on crimes related to DeFi platforms, NFTs, Stablecoins, and Crypto asset lending and staking products;
The Securities and Exchange Commission(SEC) announced on Tuesday (3rd May) that it would double the size of its cryptocurrency enforcement division, adding 20 additional positions to the Crypto Assets and Cyber Unit. The newly renamed Crypto Assets and Cyber Unit, formerly called the Cyber Unit in the Division of Enforcement, will grow to accommodate 50 dedicated positions.
The Unit is entrusted with the main responsibility of protecting investors in crypto markets from cyber-related threats. In a press release, the SEC cited the booming period for crypto markets and a corresponding responsibility for keeping crypto investors safe from the increasing risk of fraudulent investment schemes as reasons for the unit expansion.
“The bolstered Crypto Assets and Cyber Unit will be at the very forefront of protecting investors and ensuring orderly and fair markets in the face of these critical challenges,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. Commenting on the recent development, SEC Chair Gary Gensler said, “The Division of Enforcement’s Crypto Assets and Cyber Unit has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets. By nearly doubling the size of this key Unit, the Securities and Exchange Commission will be better equipped to police and control wrongdoing in the crypto markets while continuing to identify disclosure and controls issues concerning cybersecurity.”
In its announcement, SEC also expressed particular interest in crimes connected to staking and lending platforms, decentralized finance services, stablecoins, and Non-Fungible Tokens. The SEC said that the newly created staff positions would include trial counsels, fraud analysts, and investigative attorneys. While the expansion of the crypto enforcement team is a move in the right direction to tackle cyber crimes, it’s unclear whether it will be enough to meet the full range of the agency’s ambitions in the field.
Since its inception in the year 2017, the Unit has brought more than 80 enforcement actions related to fraudulent and unregistered crypto-asset offerings and platforms, resulting in monetary relief totaling more than $2 billion.The SEC in 2021 made headlines when they brought its first-ever charges against a DeFi platform, accusing the operators of the Cayman Islands-based Blockchain Credit Partners of unregistered sales of more than $30 million in securities.
