SEC plans to expand cyber fraud unit to tackle crypto-related crime

Quick Take

  • SEC plans to add 20 employees to its Cyber unit, including a mix of investigators and litigators.
  • The new hires will bolster the unit which has increased its remit to include oversight of NFTs, DeFi platforms and stablecoins.

The Securities & Exchange Commission announced plans to increase the size of its cyber unit, which investigates cryptocurrency fraud and other misconduct, with the addition of 20 new hires. 

"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,” SEC Chairman Gary Gensler said in a release on Tuesday.

The additional employees will see the unit's headcount grow to 50, including lawyers and investigators focused on cryptocurrency issuers and trading platforms, as well as NFTs, DeFi platforms and stablecoins. 

The cyber unit was set up in September 2017 during the initial coin offering (ICO) boom to combat “the spread of false information through electronic and social media, hacking and threats to trading platforms,” according to the SEC. 

Over the past five years it has brought more than 80 enforcement actions related to fraud and other misconducts, with the most high profile case involving Ripple Labs and two of its executives. The SEC first brought charges for this case in December 2020.

According to the Wall Street Journal, the new hires will be greeted by a change in leadership at the SEC’s cyber unit, as current chief Kristina Littman is set to step away from her role in June. Littman has been with the SEC since 2010, taking on her current role as cyber unit chief in December 2019. 

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