The Security Exchange Commission will expand the size of its unit devoted to investigating cryptocurrency fraud and other misconduct. An aggressive approach will be followed to bring the unregulated industry under federal authority.
The SEC plans on adding 20 investigators and litigators to its Crypto Assets and Cyber Unit. The unit was founded in September 2017 in response to a surge in digital coins being sold to the public. By positioning itself as the chief government defence against fraud in the $1.7 trillion market, the commission has largely bypassed most federal consumer- and investor-protection laws.
Gary Gensler, SEC Chairman, has compared the crypto industry to the Wild West, where fraud and abuse are rampant. The SEC filed nearly 100 cryptocurrency enforcement actions from 2013 to 2021, with most of these focusing on new crypto sales.
In recent years, cryptocurrency markets have boomed, and this has led to abuse of retail investors. With these critical challenges, a reformed Crypto Assets and Cyber Unit must be adopted to protect investors and keep markets fair and orderly.
In most cryptocurrency investigations, the SEC has reached settlements. Additionally, it is investigating Binance.US, an affiliate of Binance, the world’s largest cryptocurrency exchange. The agency might need to take more claims to federal court as it pursues cases against bigger and more successful companies.
The SEC’s special unit for cryptocurrency would have 50 attorneys and other personnel, with 20 enforcers added.
By Shahid K P
Campus Ambassador, WCSF