The U.S. Securities and Exchange Commission (SEC) unveiled the establishment of a new division on February 20, aimed at tackling cybercrime and fraudulent activities tied to blockchain and cryptocurrencies.
Named the “Cyber and Emerging Technologies Unit” (CETU), this group will work to safeguard retail investors from malicious actors in the rapidly advancing tech sector.
The CETU will consist of approximately 30 specialists and legal professionals from various SEC offices. It replaces the former “Crypto Assets and Cyber Unit,” which focused on enforcing regulations against fraudulent or unregistered crypto offerings and platforms.
Laura D’Allaird, an attorney based in Washington, D.C., who previously led the SEC’s Crypto Assets and Cyber Unit, will be at the helm of the new unit. She has also worked as counsel to SEC Commissioner Jaime Lizárraga, a member of the Democratic Party.
Mark Uyeda, acting SEC Chair, commented, “This unit will protect investors while promoting market efficiency and innovation. It will tackle individuals who exploit new technologies to harm investors and erode trust.”
The unit will leverage its expertise to target misconduct in securities transactions related to emerging technologies, including fraud via social media, false websites, and blockchain-based fraud, especially involving crypto assets.
The crypto world faces increasing scrutiny following allegations of insider trading involving memecoins. These allegations have surged since the February 14 incident surrounding the LIBRA memecoin.
Endorsed by Argentine President Javier Milei, LIBRA became a symbol of challenges faced by retail investors, who often lack access to insider information. The token’s dramatic rise and fall resulted in over $100 million for the creators but caused $251 million in losses for investors.
Jupiter, a decentralized exchange on Solana, where the rug pull occurred, stated that the LIBRA launch was widely known in memecoin circles. Jupiter has begun an investigation, and a co-founder of Meteora stepped down following the incident.
In light of the LIBRA collapse, some have criticized regulators for their unclear stance on such assets. Nic Puckrin, co-founder and CEO of The Coin Bureau, remarked, “The responsibility for the LIBRA disaster and other similar schemes lies with regulators, and they are the ones who can resolve this.”
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