SEC goes on hiring spree to bolster cryptocurrency fraud division

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The agency vows to protect investors to the best of its ability

The Securities and Exchange Commission (SEC) announced on Tuesday that it is going on a hiring spree for its unit tasked with protecting investors in cryptocurrency markets and from cyber-related threats. The newly renamed Crypto Assets and Cyber Unit will add 20 new hires, growing the Unit to 50 dedicated positions.

"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," said 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."

A heightened focus

Ever since the SEC formed the unit five years ago, its efforts have resulted in more than 80 enforcement actions related to fraud and unregistered asset offerings on platforms in the cryptocurrency world. Those actions have protected consumers and resulted in monetary relief of more than $2 billion. With the unit's expansion, the agency said it will continue to focus on investigating violations related to:

  • Crypto asset offerings;

  • Crypto asset exchanges (aka digital asset trading platforms);

  • Crypto asset lending and staking products;

  • Decentralized finance ("DeFi") platforms;

  • Non-fungible tokens ("NFTs"); and

  • Stablecoins, a digital currency tied to the U.S. dollar to minimize volatility.

According to a report by Cornerstone, the SEC has brought forward a total of 97 enforcement actions since its founding in 2013 through December 31, 2021. Going forward, the public can expect that number to grow as the group continues to tackle widespread cyber-related threats to the nation’s markets.

"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 S. Grewal, Director of the SEC’s Division of Enforcement. "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."

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