Expanding SEC’s Crypto Assets and Cyber Unit Is Essential – But There Are Potential Risks
The SEC recently announced that it was doubling the size of its unit which deals with cryptocurrency assets. It plans to increase the footprint of the unit to reach 50 agents. The unit was first launched in 2017 and since then, has brought forward over 80 enforcement actions, mostly related to fraud and unregistered offerings. It has resulted in monetary relief of over $2 billion. The focus of the new positions will be on crypto asset offerings, crypto exchanges, crypto asset lending and staking products, DeFi platforms, NFTs and stablecoins. This development brings to mind two juxtaposed positions. The first is that the digital assets industry needs greater security – particularly in the realm of ensuring that cryptocurrency exchanges provide adequate security to stymie bad actors. The industry has been plagued with hacks, and some exchanges refuse to provide the proper resources necessary to keep hackers from infiltrating their technology stacks. According to the press release, ensuring that proper cybersecurity exists is going to be a featured priority of the group.