SEC bolsters unit overseeing crypto markets, cyber threats

The Securities and Exchange Commission (SEC) is allocating 20 additional positions to a new unit responsible for protecting investors in crypto markets and from cyber-related threats.

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This newly named unit within the SEC — called Crypto Assets and Cyber Unit – will now have 50 dedicated positions. The unit was formerly known as the Cyber Unit.

“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,” 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 SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity.”

Since it was created in 2017, the unit has brought more than 80 enforcement actions related to fraudulent and unregistered crypto asset offerings and platforms. These actions have resulted in monetary relief totaling more than $2 billion. The unit has also brought numerous actions against SEC registrants and public companies for failing to maintain adequate cybersecurity controls.

The expanded Crypto Assets and Cyber Unit will focus on investigating securities law violations related to crypto asset offerings; crypto asset exchanges; crypto asset lending and staking products; decentralized finance (“DeFi”) platforms; non-fungible tokens (NFTs); and stablecoins. The 20 new positions will include supervisors, investigative staff attorneys, trial counsels, and fraud analysts, among others.

“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,” said Gurbir Grewal, director of the SEC’s Division of Enforcement, under which this new unit sits. “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.”