The Securities and Exchange Commission (SEC) has become the de facto regulator of the digital assets industry, and in its latest move, it has doubled down on this responsibility by renaming its Cyber Unit and nearly doubling the staff members—a move that could mean increased legal trouble for scammers in the sector.
JUST IN: 🇺🇸 The US SEC is hiring 20 additional staff for its enforcement #crypto asset and cyber unit.
— Watcher.Guru (@WatcherGuru) May 3, 2022
Formerly known as the Cyber Unit, it has been renamed to the Crypto Assets and Cyber Unit. The unit, which falls under the SEC’s Division of Enforcement, has received 20 new staff members to hit a headcount of 50, the watchdog announced in a press release.
“The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,” Chairman Gary Gensler commented.
“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 SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity,” he added.
The unit’s track record is impressive, having brought more than 80 enforcement actions against fraudulent and unregistered digital asset offerings since it was established in 2017 at the height of the ICO mania. These actions have led to a monetary relief of more than $2 billion.
According to blockchain analytics firm Elliptic, the unit has been a key reason that the SEC has reaped the highest penalties from the digital asset industry, over twice that of the Commodity Futures Trading Commission (CFTC).
“The bolstered Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges,” Gurbir Grewal, the director of the SEC’s Enforcement Division, remarked.
The new additions to the Crypto Asset and Cyber Unit come months after Gensler told the Senate that his agency needed way more staff members if it needed to regulate the rapidly-growing industry.
“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending. Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted,” Gensler stated, speaking to the Senate Banking Committee in September.
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