- SEC’s CETU to target fraud involving crypto, AI, and blockchain.
- New unit strengthens cybersecurity oversight for financial firms.
- SEC adopts a balanced crypto approach, supporting innovation and security.
The U.S Securities and Exchange Commission (SEC) has launched a new unit, Cyber and Emerging Technologies Unit (CETU), to tackle fraud related to cyber and emerging technologies. This unit replaces the previous Crypto Assets and Cyber Unit. The unit’s primary goal is to safeguard investors from misconduct in the digital asset space.
SEC Crypto Unit
Laura D’Allaird will lead the CETU, which consists of about 30 fraud specialists and attorneys from various SEC offices. The unit will collaborate with the SEC’s Crypto Task Force to enforce effective protection measures for investors. This collaboration aims to address fraud and misconduct within the digital asset space and ensure proper investor protection.
The CETU will target fraud in areas such as artificial intelligence, social media schemes and hacking to obtain nonpublic information.The unit will also focus on misconduct linked to blockchain technology and crypto assets.
Roles of CETU
Acting SEC Chairman Mark Uyeda emphasized the importance of the new unit in maintaining market efficiency. He stated that the CETU will not only protect investors but also support innovation. This approach will help promote growth as well as ensure a secure environment for digital and emerging technologies.
Moreover, the CETU will oversee cybersecurity compliance among regulated entities. The unit will monitor how financial firms and public issuers handle cybersecurity risks. It will also ensure that brokerage firms and investment advisers follow SEC rules to protect investors from cyber threats.
The SEC has increased its focus on cybersecurity due to rising threats against financial institutions. Recent incidents such as retail brokerage account takeovers and hacking attacks have raised concerns. As a result, the SEC has implemented stricter regulations, and the CETU will play a critical role in enforcing them.
Regulatory Shift in SEC
The CETU launch comes amid changes in regulatory approaches towards cryptocurrency. The Biden administration initially adopted a strict stance on crypto firms, but recent changes have led to a more balanced approach. The SEC aims to protect investors and foster industry growth amid key legal battles.
Moreover, the SEC recently withdrew its appeal in a case challenging its dealer rule expansion. The Blockchain Association and Crypto Freedom Alliance of Texas filed the lawsuit in 2024. Meanwhile, the SEC has requested an extension in its case against Coinbase which further indicates ongoing changes in the SEC’s approach.
The SEC’s CETU will play a crucial role in shaping the regulatory landscape for digital assets. Its focus on cybersecurity and fraud prevention will contribute to a safer environment for innovation and digital technologies.