SEC creates new Cyber and Emerging Technologies Unit “to protect retail investors”
New team will focus on fraud in the digital world, including in crypto and blockchain.
The SEC said it has created a new team, known as the Cyber and Emerging Technologies Unit, to focus on rooting out fraud committed in the emerging technologies space, including in crypto.
The move is the latest sign that the new administration is putting a focus on the growing popularity of crypto. Earlier Friday, the SEC dropped an ongoing lawsuit against Coinbase, prompting the crypto exchange’s CEO to lay praise on President Trump, who has called himself a friend of the crypto industry.
The new unit will replace the previous Crypto Assets and Cyber Unit. It will “focus on combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space,” the announcement said.
Jeff Le, managing principal at emerging tech consultancy 100 Mile Strategies and the former deputy cabinet secretary to California Governor Jerry Brown, said the new unit represents a clear signal for more government and industry collaboration on an issue both sides see as a challenge for broader adoption.
“With the administration clearly showing less interest for hammer and nail enforcement, recommendations from this leaner and more collaborative task force could yield clearer guidance that both lawmakers and industry can count as a win for consumer protection,” Le said.
Laura D’Allaird will run the unit, which includes “30 fraud specialists and attorneys across multiple SEC offices.” Previously, D’Allaird has held several enforcement roles at the SEC, according to her LinkedIn profile.
“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 T. Uyeda said in the announcement. “It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”
Some of the areas it will focus on include fraud using AI and machine learning, the use of social media and the dark web, hacking, “takeovers of retail brokerage accounts,” “fraud involving blockchain technology and crypto assets,” and “regulated entities’ compliance with cybersecurity rules and regulations.”
Ari Redbord, VP and global head of policy and government affairs at TRM Labs, said CETU is another “great example of the way agencies like the DOJ, SEC, CFTC, and others are laser-focused on fraud, cybercrime, and other illicit activity that threatens the crypto ecosystem.”
“In the age of AI, illicit actors can remove human bottlenecks to commit crimes at alarming speed and scale,” he said. “This enforcement of illicit actors rather than lawful crypto businesses is critical to growing the ecosystem in a safe and secure way.”
Yaël Bizouati-Kennedy is a financial journalist who’s written for Dow Jones, The Financial Times Group, and Business Insider.
