The Securities and Exchange Commission (SEC) is nearly doubling the number of dedicated positions responsible for protecting cryptocurrency investors.The SEC Enforcement Division recently announced its plan to add 20 positions to the SEC Crypto Enforcement team, bringing the unit to a total of 50 positions.
What Does the SEC Crypto Assets and Cyber Unit Do?
Formerly known as the “Cyber Unit,” the team will be responsible for investigating securities violations related to the following:
- Crypto asset offerings
- Crypto asset exchanges
- Lending and staking products
- Decentralized platforms (DeFi)
The new additions will include fraud analysts, trial lawyers, and investigative staff attorneys. SEC chair Gary Gensler has been relentless in his efforts to regulate the crypto industry and believes the added positions will continue to protect retail investors from those who fail to comply with SEC law.
“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,” said Gensler. “By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues concerning cybersecurity.”
The SEC Crypto Enforcement team has tackled more than 80 violations related to fraud and unregistered crypto securities offerings, resulting in $2 billion of monetary relief.
Targeting Fraud in Cryptocurrency
“There is no reason to think the SEC will ignore potential securities violations and consumer fraud in the crypto space,” says Michael Brandwein, Senior Attorney at Gordon Law Group. “The SEC is a juggernaut that has broad authority to bring civil enforcement actions against companies that do not comply with its rules and regulations.”
“Furthermore, the SEC can refer cases to the Department of Justice for criminal enforcement. People need to understand how serious an SEC violation can be and the ramifications, monetarily and otherwise, associated with such negligence or willful violations.”
Since being named SEC chair in April 2021, Gensler has made it clear that cryptocurrency is a top priority on his regulatory agenda. His main goal is to reduce the number of scams, including “rug pulls,” in which investors suffer the most damage.
“It’s unlikely people will stop taking advantage of unsuspecting investors,” says Brandwein. “However, hopefully, it mitigates the volume of scams and allows the SEC to identify the culprits behind such scam operations.”
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