US SEC forms new unit to fight cyber and crypto crimes

As the US Securities and Exchange Commission (SEC) continues to restructure under new leadership, a new unit has emerged. It’s tasked with fighting cybercrime in securities-related areas.

The Cyber and Emerging Technologies Unit (CETU) is expected to combat cyber-related crime and protect retail investors from criminals in the emerging technologies space. The new unit is led by Laura D’Allaird, who co-led the SEC's Crypto and Cyber Unit and was involved in multiple cases against companies in the crypto space, such as the major crypto exchange Kraken.

CETU, which now has around 30 fraud specialists and attorneys across multiple SEC offices, replaces the aforementioned Crypto and Cyber Unit. Moreover, it will also complement the work of the Crypto Task Force, led by Commissioner Hester Peirce.

The task force was also created this past January, as the SEC aims to "provide clarity on the application of federal securities laws to the crypto asset market and to recommend practical policy measures that aim to foster innovation and protect investors."

Under the previous leadership of Gary Gensler, who stepped down after Donald Trump's victory in the presidential election, the SEC was criticized by the crypto industry for its regulation-by-enforcement approach and lack of clarity on how existing rules should be applied to this nascent industry.

Now, CETU will be focusing on seven priority areas to combat misconduct. These include:

• Fraud committed using emerging technologies such as artificial intelligence and machine learning
• The use of social media, the dark web, or fraudulent websites to perpetrate fraud
• Hacking to obtain material nonpublic information
• Takeovers of retail brokerage accounts
• Fraud involving blockchain technology and crypto assets
• Regulated entities’ compliance with cybersecurity rules and regulations
• Public issuers' fraudulent disclosures relating to cybersecurity.

"Importantly, the new unit will also allow the SEC to deploy enforcement resources judiciously," Acting Chairman of the SEC, Mark T. Uyeda, was quoted as saying in the announcement.

According to him, the unit will not only protect investors but will also facilitate capital formation and market efficiency by "clearing the way for innovation to grow."

"It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies," Uyeda added.