Dive Brief:
- The Securities and Exchange Commission on Thursday unveiled a revamped anti-fraud unit to protect retail investors in emerging technologies, reflecting the Trump administration’s evolving approach to cryptocurrency and cybersecurity.
- The Cyber and Emerging Technologies Unit, led by Laura D’Allaird, will have about 30 fraud specialists from across the agency and replaces the Crypto Assets and Cyber Unit. The revised CETU will complement a crypto task force launched in January under the leadership of Commissioner Hester Peirce.
- “The unit will not only protect investors, but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow,” Acting SEC Chairman Mark Uyeda said in a statement. “It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”
Dive Insight:
The reconfigured anti-fraud unit is part of an effort to streamline the oversight of new technologies by the Trump administration.
SEC actions to regulate cybersecurity had been the subject of fierce debate under former Chairman Gary Gensler, who backed aggressive measures to get companies to report material data breaches and update investors on risk mitigation strategies.
D’Allaird was promoted to co-chair of the Crypto Assets and Cyber Unit in December.
The CETU will prioritize a number of areas related to cyber disclosure, emerging concerns about artificial intelligence and machine learning, and fraud related to blockchain technology and crypto assets.
“Consistent with the administration’s oft-stated intentions to attract the crypto industry and reduce regulatory hurdles, the new unit appears to signal a shift away from targeting industry players to broader cybercrimes or issues that affect retail investors regardless of industry vertical,” said Aloke Chakravarty, a partner at Saul Ewing and a former assistant U.S. Attorney for the district of Massachusetts.
Coinbase on Friday said staff at the SEC has agreed in principle to drop charges against the company, pending Commissioner approval.
Michael Lowe, a partner at Troutman Pepper Locke, said the unit is part of a shift away from the SEC treating all digital assets as “securities.” However, Lowe does not expect any major change in how the agency enforces cyber disclosure rules.
