Key points to remember
- The SEC is growing its crypto assets and cyber unit from 30 to 50 positions.
- The unit will focus on coin offerings, DeFi, NFT, and other areas of the crypto space.
- The SEC has come under fire for its approach to regulating the crypto market in the past.
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SEC Chairman Gary Gensler said the scaling would help the unit monitor wrongdoing in the unregulated cryptocurrency market.
US Regulator Nearly Doubles Crypto Crime Unit
The Securities and Exchange Commission has signaled that it is ready to crack down on digital asset crime.
Wall Street’s chief regulator announced on Tuesday that it had assigned 20 new positions to its Crypto Assets and Cyber Unit, increasing its size to 50 dedicated positions. The unit aims to protect investors by identifying criminal crypto-related activity and prosecuting those responsible.
In a statement, SEC Chairman Gary Gensler said it has become “increasingly important to devote more resources to protecting [investors]” as digital assets have become more accessible. “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 cybersecurity disclosure and oversight issues,” he added. .
SEC crypto monitoring
The Crypto Assets and Cyber Unit was created in 2017 as Cyber Unit when the crypto space was experiencing a wave of ICO mania. He has since filed more than 80 enforcement actions against fraudulent crypto trades with approximately $2 billion in monetary relief. According to the SEC statement, the newly strengthened unit will focus on securities law violations related to coin offerings, exchanges, lending and staking products, DeFi, NFTs and stablecoins.
Gensler has previously stated that he believes many crypto assets could pass the Howey test and therefore qualify as securities with reference to DeFi. Meanwhile, in March, it was revealed that the SEC was beginning to look into the fast-growing NFT market.
Although the SEC has clearly tried to crack down on misconduct in the crypto arena in recent years, it has occasionally faced criticism for its efforts. Ethereum software company ConsenSys recently sent a letter to the regulator regarding a proposal to expand the definition of a crypto asset exchange. Last year, the US regulator memorably threatened legal action against Coinbase over its Lend product, claiming the feature could be classified as an unregistered security. Coinbase released a statement criticizing the SEC, then scrapped the product. Many active US crypto investors have also missed out on lucrative airdrops from DeFi projects like dYdX due to restrictions imposed by the SEC in the past. And despite having a dedicated crime unit, the SEC is struggling to keep up with the growing list of fraudulent actors occupying the DeFi and NFT sectors. With 20 new additions to its unit, the agency should now be better equipped to oversee the space.
Disclosure: At the time of writing this article, the author of this article owned DYDX, ETH, and several other cryptocurrencies.