SEC Rebrands Crypto Enforcement Unit Amid Shift in Strategy
The U.S. Securities and Exchange Commission (SEC) has announced a significant reorganization of its unit dedicated to overseeing the cryptocurrency sector. This unit, previously known as the “Cyber Unit” and later the “Crypto Assets and Cyber Unit,” will now be referred to as the “Cyber and Emerging Technologies Unit.” This change reflects a broader trend within the SEC to adopt a less aggressive enforcement posture toward the cryptocurrency industry.
Over the past three years, the SEC’s internal group has undergone several transformations. Initially, under the leadership of former Chairman Gary Gensler, the enforcement squad was expanded, nearly doubling its size to 50 personnel dedicated to combating fraud in emerging technologies. However, the latest announcement indicates that this unit will now consist of “approximately 30 fraud specialists and attorneys” spread across various SEC offices, signaling a potential reduction in its focus on crypto-related issues.
Acting Chairman Mark Uyeda expressed optimism about the unit’s new direction, stating, “The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow.” He also introduced Laura D’Allaird as the head of this revamped group, emphasizing its mission to address misuse of innovation that could harm investors and erode confidence in new technologies.
This shift in language marks a stark contrast to the more aggressive rhetoric employed by Gensler in 2022, when he characterized the unit’s mission as targeting “those seeking to take advantage of investors in crypto markets.” Under Uyeda’s interim leadership, following his elevation to Chairman while awaiting Senate confirmation for former Commissioner Paul Atkins, the SEC is recalibrating its approach to the cryptocurrency landscape.
In addition to the rebranding of the enforcement unit, Uyeda has established a Crypto Task Force within the SEC, overseen by fellow Republican Commissioner Hester Peirce. This task force is designed to complement the efforts of the Cyber and Emerging Technologies Unit. While continuing to investigate fraud related to blockchain technology and crypto assets, the unit will also expand its focus to include monitoring unlawful uses of artificial intelligence, cyber hacks, and other cybersecurity vulnerabilities.
