Crypto fraud reached a new high of $14 billion in 2021. Owing to this alarming fact, US is set to double the size of its cryptocurrency fraud department.
The Securities and Exchange Commission (SEC) stated Tuesday that it will quadruple the capacity of its cryptocurrency fraud branch in an effort to combat fraudulent activity in the booming digital space.
The SEC intends to add 20 employees to the Division of Enforcement’s Crypto Assets and Cyber Unit. The division will be expanded to include 50 specialized staff.
“The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,” SEC Chair Gary Gensler said in a statement.
The team was established in 2017 and has been actively investigating fraud in the $1.7 trillion uncontrolled market.
Agents will be able to examine securities law violations in the following areas as a result of the expansion of the units:
- Crypto asset offerings;
- Crypto asset exchanges;
- Crypto asset lending and staking products;
- Decentralized finance (“DeFi”) platforms;
- Non-fungible tokens (“NFTs”); and
- Stablecoins.
The SEC’s increased scrutiny arrives after Gensler stated in April that the agency was considering ways to improve investor protections.
Crypto fraud reached a new high of $14 billion in 2021, according to blockchain research firm Chainalysis. This is nearly double the $7.8 billion plundered by con artists in 2020.
According to Gensler, the SEC’s crypto division “has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets.”
“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 controls issues with respect to cybersecurity,” Gensler added.
“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,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated at the conclusion of the statement.
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