SEC to Double Crypto, Cyber, Resources
Posted by Colin Lambert. Last updated: May 3, 2022
While the US regulatory scene regarding cryptoassets remain in a state of flux, the country’s Securities and Exchange Commission (SEC) is clearly confident it will be a big part of the process as it is allocating more resources to its newly-named Crypto Assets and Cyber Unit.
The SEC says an additional 20 staffers will be added to the unit, which sits within the SEC’s Division of Enforcement, the crypto unit will ultimately grow to 50 positions. Since its creation in 2017, the unit has brought more than 80 enforcement actions related to fraudulent and unregistered crypto asset offerings and platforms, resulting in monetary relief totalling more than $2 billion.
In addition, the unit has brought numerous actions against SEC registrants and public companies for failing to maintain adequate cybersecurity controls and for failing to appropriately disclose cyber-related risks and incidents.
The SEC says the expanded Crypto Assets and Cyber Unit will leverage the agency’s expertise to ensure investors are protected in the crypto markets, with a focus on investigating securities law violations related to crypto asset offerings; crypto asset exchanges; crypto asset lending and staking products; decentralised finance (defi) platforms; non-fungible tokens (NFTs); and Stablecoins.
“The US 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,” says SEC chair Gary Gensler. “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.”
Gurbir Grewal, director of the SEC’s Division of Enforcement, adds, “Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space. Meanwhile, cyber-related threats continue to pose existential risks to our financial markets and participants. 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.”