SEC Expands Crypto Enforcement Unit to Combat Fraud

    
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    The US Securities and Exchange Commission is adding 20 more positions to the newly renamed Crypto Assets and Cyber Unit (formerly the Cyber Unit), the commission said Tuesday. The unit is tasked with protecting investors in crypto markets and against cyberthreats. The unit will grow to 50 people with the new positions.?
    “As more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,” SEC Chair Gary Gensler said in a release. “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.”
    The unit was created in 2017. Since then, it’s brought more than 80 enforcement actions related to “fraudulent and unregistered” crypto offerings and platforms. The announcement clarifies that the unit will focus on investigating securities law violations in the following areas:

• Crypto asset offerings.
• Crypto asset exchanges.
• Crypto asset lending and staking products.
• Decentralized finance platforms.
• Non-fungible tokens.
• Stablecoins.

    This announcement comes nearly two months after US President Joe Biden issued an executive order requesting government agencies to come up with policy recommendations for a cryptocurrency industry that’s still dealing with its fair share of hacks and thefts.
    Two of the largest cryptocurrency-related thefts occurred earlier this year. In February, hackers stole $324 million from blockchain platform Wormhole. Hackers also made off with $600 million from Axie Infinity’s Ronin network in March.?
    “Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space,”? said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. “Meanwhile, cyber-related threats continue to pose existential risks to our financial markets and participants.”
    
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