SEC Launches New Cyber Unit, Empowers It to Tackle Cryptocurrency-Related Fraud Cases
U.S. regulator unveils CETU, expands enforcement capabilities to fight against mounting digital threats and to protect investors in the evolving crypto market.
The U.S. Securities and Exchange Commission (SEC) unveiled its Cyber and Emerging Technologies Unit (CETU) on Thursday.
Acting SEC Chair Mark Uyeda announced a press release on the agency’s website stating, “The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow.”
The new enforcement division will tackle cyber crimes linked to cryptocurrency, artificial intelligence (AI), and blockchain. The unit replaces the agency’s former Crypto Assets and Cyber Unit, established in 2017, primarily focusing on protecting retail investors from digital fraud.
Laura D’Allaird’s Leadership and Expertise
The SEC picked Laura D’Allaird, a seasoned SEC attorney and former co-chief of the legacy Crypto Assets and Cyber Unit, to lead CETU. Laura has a lot of experience handling high-profile crypto cases. In 2020, she represented the SEC in an infamous lawsuit against messaging platform Kik Interactive, a case she would go on to eventually win.
Additionally, CETU will deploy roughly 30 fraud specialists, lawyers, and cybersecurity experts across SEC offices. Their expertise will cover areas across fintech, blockchain, and AI.
CETU’s Priority Enforcement Areas
According to the press release, CETU will prioritize several issues in its crypto-related fraud crackdown.
The unit’s main focus would be to prevent crypto and blockchain fraud as much as possible by targeting unregistered securities, market manipulation, and scams involving decentralized finance platforms. Another key area is investigating fraud schemes perpetrated through predictive algorithms like AI and machine learning.
Furthermore, CETU will prioritize disrupting fraudulent campaigns, especially on the dark web and social media platforms like X, and hold firms accountable for poor data protection practices.
Collaboration with SEC
CETU will work closely with the SEC’s crypto task force, led by digital assets advocate Commissioner Hester Peirce. This partnership aligns with the SEC’s broader strategy of streamlining crypto industry oversight while encouraging innovation.
With crypto-friendly Republican President Donald Trump on the reins, the SEC seeks to change its former stance of “brute regulation enforcement” under former Chair Gary Gensler.
The U.S. SEC plans to use CETU to address this issue by tackling fraud cases head-on. This is in hopes of rebuilding market confidence and creating clearer frameworks for legitimate projects.
