SEC to hire more crypto cops to fight digital frauds
The Securities and Exchange Commission will boost the size of its special unit devoted to investigating cryptocurrency frauds and other misconduct, a move that follows the agency’s aggressive push to get the unregulated industry to come under federal supervision.
The SEC said it plans to add 20 investigators and litigators to its Crypto Assets and Cyber Unit, which was created in September 2017 when regulators noticed a surge of new digital coins sold to the public. The commission has positioned itself as the chief government bulwark against fraud in the $1.7 trillion market, which so far has sidestepped most federal consumer- and investor-protection rules.
SEC Chairman Gary Gensler says the crypto industry is rife with fraud and abuse, likening it to the “Wild West." The SEC filed nearly 100 cryptocurrency-related enforcement actions from 2013 to 2021, according to Cornerstone Research, with most of those targeting new sales of digital coins.
“Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space," SEC Enforcement Director Gurbir S. Grewal said in a written statement. “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."
The SEC has so far resolved most cryptocurrency investigations through settlements, although it is litigating with Ripple Labs Inc. and two of its executives over the sale of a well-known digital coin, XRP.
It is also investigating Binance.US, an affiliate of Binance, the world’s largest cryptocurrency exchange. As the agency pursues cases against bigger and more successful companies, regulators might need to take more claims to
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