The United States Securities and Exchange Commission (SEC) will boost the number of its cyber unit, stating that the increased headcount would be useful in better protecting investors in the burgeoning cryptocurrency market.
More Personnel to Protect Investors and Fight Crypto-Related Fraud
According to an official press release on Tuesday (May 3, 2022), the SEC is hiring 20 new positions for its cyber unit, which is nearly double the size of the personnel. The additions will grow the unit’s number to 50 and will include trial counsels, supervisors, fraud analysts, and investigative staff.
The announcement also said that the expanded cyber unit has been renamed the Crypto Assets and Cyber Unit, and will be responsible for ensuring investors’ protection. Also, the unit will focus on cryptocurrency exchanges, decentralized finance (DeFi) projects, lending and staking, and stablecoins.
Established in 2017, the formerly known Cyber Unit within five years has brought over 80 enforcement actions in connection with fraudulent and unregistered cryptocurrency offerings. In December 2020, the SEC filed a lawsuit against blockchain firm Ripple, alleging that the company, along with CEO Brad Garlinghouse and co-founder Chris Larsen, sold unregistered securities.
Gary Gensler, Chairman of the SEC, said that more people are investing in crypto, and it was important to institute robust resources to protect these investors. A statement by Gensler said:
“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 disclosure and control issues with respect to cybersecurity.”
Also, Director of the SEC’s Division of Enforcement Gurbir S. Grewal said:
“Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space[…]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.”
SEC and Spot Bitcoin ETF Applications
Meanwhile, the latest development comes shortly after Gensler told U.S. lawmakers back in September 2021 that the securities regulator needed more personnel to monitor and regulate over 6,000 digital projects. The SEC head said at the time:
“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending. Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”
The SEC has always emphasized investors’ protection, stating that the crypto market came with risks such as price volatility and market manipulation. Such concerns form part of the reasons why the American regulator is yet to approve a spot Bitcoin exchange-traded fund (ETF) filing.
Back in March, the SEC rejected spot Bitcoin ETF proposals from New York Digital Investment Group(NYDIG) and Global X. In In the same month, the CEO of Grayscale Investments Michael Sonnenshein, said that the company could take legal action if the SEC failed to greenlight its spot Bitcoin ETF application.
Sonnenshein also argued that favoring a futures-based Bitcoin ETF did not necessarily address the regulator’s concerns about bitcoin.
Source: https://crypto.news/sec-unit-protect-investors-crypto-industry/