A recent press release revealed that the Securities and Exchange Commission's (SEC) Cyber Unit, renamed the Crypto Assets and Cyber Unit, has nearly doubled in size to meet expanding demands for investor protections of digital assets and cyber threats. The unit now consists of 50 dedicated positions.
According to SEC Chair Gary Gensler, the U.S. has the greatest capital markets because investors have faith in their security. As more investors gain access to crypto markets, it is becoming increasingly important to dedicate more resources to protecting them. The team has already successfully brought dozens of cases against entities that seek to take advantage of investors in crypto markets. The SEC will now be better equipped to police wrongdoing in crypto markets after growing the team.
Since its inception in 2017, the unit executed 80 enforcement actions against unregistered and fraudulent crypto-asset offerings and platforms producing monetary relief of more than $2 billion. Investigating securities law violations will be focused on the following:
It is important to note that Bitcoin and other networks or services related to Bitcoin are not mentioned within their investigations of securities law violations. In the past, the SEC has claimed that Bitcoin is not a security or falls under the same umbrella as cryptocurrencies.
The SEC recognizes in the press release that crypto markets have exploded in recent years and that retail investors have suffered the majority of abuses in this unregulated space. The press release also states that cyber-related threats continue to pose existential risks to financial markets and participants, warranting a larger team. More actions from the SEC are likely to take place as markets grow in the future.
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