SEC Forms New Cyber and Emerging Technologies Unit To Tackle Crypto Fraud and Cybercrime
On Feb. 20, 2025, the U.S. Securities and Exchange Commission (SEC) announced the creation of the Cyber and Emerging Technologies Unit (CETU) to combat cybercrime and fraud in the blockchain and cryptocurrency sectors. This new unit will replace the SEC's former Crypto Assets and Cyber Unit and will focus on protecting retail investors from fraud and misconduct in the emerging technology space.
The CETU will be made up of about 30 fraud specialists and attorneys from various SEC offices. Laura D'Allaird, the attorney who previously led the Crypto Assets and Cyber Unit, will head the new group. Under her leadership, the SEC successfully handled cases such as the one against Kik Interactive for violating federal securities laws. The new unit's scope will include tackling fraud in blockchain technology, cryptocurrency, artificial intelligence, and other emerging tech sectors.
Acting SEC Chairman Mark Uyeda stated that the unit would not only safeguard investors but also support the growth of innovation by fostering a clear and efficient market. The unit will investigate fraudulent activities related to securities transactions, with a particular focus on scams involving social media, the dark web, and false websites.
The SEC's move comes as the cryptocurrency industry faces continued challenges with fraud and scams. Recent events, such as the LIBRA meme coin scandal involving Argentine President Javier Milei, have highlighted the lack of regulatory clarity in the crypto space. The scam led to a significant loss for investors, with over $250 million wiped out after the coin was pumped and quickly dumped. Jupiter, the decentralized exchange involved in the incident, confirmed that the launch of the Milei-endorsed coin was widely known within the meme coin community, fueling concerns over insider trading and fraud.
Last year, the SEC brought 33 enforcement actions against crypto-related fraud, securing penalties totaling $8.2 billion. A large portion of these penalties came from the SEC's case against Terraform Labs and its founder, Do Kwon. The SEC's aggressive stance under the Biden administration has been marked by increased efforts to regulate digital assets and protect investors from scams.
However, some industry figures believe the SEC's regulatory approach needs refinement. Nic Puckrin, co-founder of The Coin Bureau, criticized the lack of regulatory clarity, particularly concerning meme coins, which he says have been prone to scams and pump-and-dump schemes. Despite the challenges, the SEC's new unit aims to provide better oversight and transparency as it continues to address the growing complexities of the cryptocurrency and emerging tech sectors.
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