SEC Launches Cyber Unit to Combat Blockchain Fraud

Despite the ongoing meme on crypto-twitter that “crime is legal,” it appears crime is still very much illegal, as the Securities and Exchange Commission (SEC) allocates resources to combat blockchain-based fraud.

The Cyber and Emerging Technologies Unit (CETU) is set to replace the Crypto Assets and Cyber Unit and will be led by Laura D’Allaird, alongside 30 fraud specialists and attorneys who work with the SEC.

The SEC’s acting chair, Mark Uyeda, 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.”

The unit’s formation comes at a tenuous time in the crypto space, which is no stranger to fraud and scams. However, the fraudulent behavior has reached new heights recently, following the launch of politically affiliated memecoin pump and dump schemes such as MELANIA and LIBRA.

Outside of the blatant scams in the memecoin space, hacker groups such as North Korea’s Lazarus Group are growing more brazen and just pulled off the largest heist in crypto history by stealing $1.5 billion from centralized exchange Bybit.

The hack surpassed Saddam Hussein’s bank robbery in March 2003, where the Iraqi leader stole $1 billion from the Central Bank of Iraq.

In addition to blockchain-based fraud cases, the CETU will also focus on fraud committed using artificial intelligence (AI) and social media, hacking cases pertaining to nonpublic information or retail brokerage account takeovers, and cybersecurity of regulated entities.

Laura D’Allaird previously served as co-chief of the unit’s predecessor, the Crypto Assets and Cyber unit.