SEC doubles the size of its crypto fraud unit

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(Kitco News) The US Securities and Exchange Commission (SEC) is adding 20 more positions to its Crypto Assets and Cyber ​​Unit, nearly doubling in size.

The unit is responsible for protecting investors in the crypto markets space and from cyber-related threats. The Crypto Assets and Cyber ​​Unit will now have 50 dedicated positions in total.

The goal is to step up crypto fraud oversight, according to SEC Chair Gary Gensler.

“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,” Gensler said in a press release. “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.”

The unit, which was created just in 2017, has already brought dozens of cases forward against actors looking to take advantage of crypto investors.

The press release published by the SEC on Tuesday stated that there were more than 80 enforcement actions “related to fraudulent and unregistered crypto asset offerings and platforms, resulting in monetary relief totaling more than $2 billion.”

The focus of the unit going forward will be to prevent fraud related to crypto-asset offerings, asset exchanges, asset lending and staking products, DeFi platforms, non-fungible tokens (NFTs), and stablecoins.

The move comes as cyber-related threats are on the rise in the US, said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

“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,” Grewal stated.

Positions that the unit is looking to fill include supervisors, investigative staff attorneys, trial counsels, and fraud analysts.

The SEC’s crypto unit is expanding nearly eight months after Gensler tested before the Senate Banking Committee that he could use “a lot more people.”

“We need to be sure that the Commission has the resources to protect [investors] … We could use a lot more people. There are 6,000 projects and many of them are securities under the laws,” Gensler said back in September. “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. This asset class is rife with fraud, scams, and abuse in certain applications. We can do better.”

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