US SEC ramps up crypto fraud oversight by adding 20 employees

The US Securities and Exchange Commission said on Tuesday it will add 20 positions to its enforcement unit for crypto markets in its push to curb fraudulent activities in the hot digital space.

The securities regulator said the division will be renamed the “Crypto Assets and Cyber Unit” and will have a total of 50 employees.

“By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity,” SEC Chair Gary Gensler said.

The SEC said the revamped unit will focus on preventing fraud that uses crypto asset offerings, crypto asset exchanges, crypto asset lending and staking products, decentralized finance platforms, non-fungible tokens and stablecoins.

Much of crypto trading is based in offshore jurisdictions and operates in a regulatory gray area, with no centralized system of oversight.

Trading can bypass the traditional gatekeepers of finance, such as banks and exchanges.

The expanded SEC oversight comes after Gensler in April said the agency was weighing how it could extend investor protections afforded to users of exchanges and alternative trading platforms. Crypto trading platforms could also be covered, he said.