The Securities and Exchange Commission (SEC) is nearly doubling its unit dedicated to cyber crimes in an effort to delve more into crypto-related enforcement. The federal agency announced Tuesday it is adding 20 positions, including investigative staff attorneys, trial counsels, fraud analysts, and supervisors, to be “better equipped to police wrongdoing in the crypto 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, in a press release. “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.”
Over the past five years, the SEC says the unit had pursued more than 80 investigations into “fraudulent and unregistered crypto,” recovering more than $2 billion. Still, The Wall Street Journal quotes SEC Chairman Gary Gensler referring to the $1.7 trillion crypto market as the “Wild West,” as it has operated with limited federal oversight so far.
With this expansion, the SEC is looking to focus on securities law violations stemming from crypto asset offerings, exchanges, lending, and staking products, as well as decentralized finance platforms, non-fungible tokens, and stablecoins. As concerns have mounted over crypto’s connection to crimes, including drug and human trafficking, other federal agencies have similarly upped their investments into crypto operations in recent months.
In February, the Federal Bureau of Investigations launched a Virtual Asset Exploitation Unit, which will collaborate with the National Cryptocurrency Enforcement Team the Justice Department established last fall. According to the WSJ, this unit will “provide blockchain analysis, virtual asset seizure and training to the rest of the FBI.” The team’s overarching goal will be to clamp down on criminal uses of these digital assets. The Biden administration directed additional agencies to explore new policies, regulations, and opportunities related to cryptocurrency in a March executive order, which also signaled interest in developing a US digital currency.