The Securities and Exchange Commission (SEC) in the United States has taken significant steps to strengthen its capabilities in dealing with cryptocurrency and cybersecurity issues. In an effort to enhance investor confidence and promote transparency in listed companies, the SEC has expanded its Crypto Assets and Cyber Unit by adding 20 new positions. This unit, previously known as the Cyber Unit, now consists of 50 dedicated positions within the Division of Enforcement.
The SEC highlighted the success of the unit in tackling fraudulent and unregistered crypto assets, with over 80 enforcement actions taken since 2017, resulting in savings of more than $2 billion for investors and stakeholders. Despite these achievements, the SEC acknowledged the increasing risks faced by investors from scams involving NFTs, crypto assets, exchanges, lending and staking products, DeFi platforms, and stablecoins.
The expanded enforcement team will include additional supervisors, investigative staff attorneys, trial counsels, and fraud analysts based in the SEC’s headquarters in Washington DC and regional offices. SEC Chair Gary Gensler emphasized that these new resources will strengthen efforts to combat wrongdoing in the crypto markets and address disclosure and controls issues related to cybersecurity.
Gurbir Grewal, the director of the SEC’s Division of Enforcement, pointed out that retail investors have been disproportionately affected by illegal activities in the rapidly evolving crypto space. He emphasized the importance of protecting investors and maintaining fair and orderly markets in the face of these challenges.
Cyber-related threats continue to pose significant risks to financial markets and participants, with investment fraud ranking as the second highest-grossing cybercrime type in 2021, resulting in losses of nearly $1.5 billion reported to the FBI.
The SEC’s commitment to enhancing its capabilities in cryptocurrency and cybersecurity enforcement reflects its dedication to safeguarding investors and maintaining the integrity of the financial markets. By bolstering the Crypto Assets and Cyber Unit, the SEC is taking proactive steps to address emerging threats and promote a secure and transparent investment environment.