SEC replaces cryptocurrency fraud unit with team aimed more broadly at emerging tech

The Securities and Exchange Commission said on Thursday that it is replacing a unit that emphasized fighting fraudulent cryptocurrency offerings with a smaller team that will focus on “cyber-related misconduct” affecting investors.

The new Cyber and Emerging Technologies Unit (CETU) will combat fraud committed through means such as artificial intelligence, social media, the dark web, blockchain technology, hacking and account takeovers, the SEC said in a news release.

CETU replaces the Crypto Assets and Cyber Unit, which had its origins in the first Trump presidency and grew to about 50 people in the Biden administration. The new team will have about 30 people, the SEC said.

The announcement tracks with President Donald Trump’s claims that he wants to end the federal government’s “war” on the cryptocurrency industry. Under previous Chairman Gary Gensler, the SEC was known for touting its enforcement actions against fraud involving digital assets.

Laura D’Allaird, who was made co-leader of the crypto assets unit in December, will be in charge of CETU, the SEC said. 

“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,” acting SEC Chairman Mark Uyeda said. 

CETU’s work will complement the activities of a Crypto Task Force created on January 25, Uyeda said. The SEC touted that group as the beginning of the agency’s “Crypto 2.0” approach to “developing a comprehensive and clear regulatory framework for crypto assets.”

The new unit “will utilize the staff’s substantial fintech and cyber-related experience to combat misconduct,” the agency said.