Today's Paper Latest Primary runoff results Voter guide Sports Core Values Newsletters Weather Obits Puzzles Archive Story ideas iPad
ADVERTISEMENT
ADVERTISEMENT

SEC expands its crypto-fraud team

Agency adding 20 staff members to program targeting consumer abuses by The Washington Post | May 4, 2022 at 2:46 a.m.

The Securities and Exchange Commission is nearly doubling the size of its team dedicated to policing cryptocurrency market abuses, the latest sign of the Wall Street regulator's get-tough approach to the booming industry.

The agency is adding 20 staffers to its crypto enforcement unit, including investigative staff attorneys, trial lawyers and fraud analysts, it said in a statement Tuesday. The move will bring the newly renamed Crypto Assets and Cyber Unit to 50 people, beefing up its ability to police securities law violations involving new coin offerings, crypto exchanges, decentralized finance platforms and non-fungible tokens, among other items, the agency said.

"The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them," SEC Chair Gary Gensler said in the statement. The expanded office will expand the agency's ability to "police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity," Gensler said.

The office has brought more than 80 enforcement actions since launching in 2017, securing more than $2 billion in penalties, according to the agency. Over the past five years, meanwhile, the industry's total market value surged more than 40-fold, to roughly $1.7 trillion. The boom has left "retail investors bearing the brunt of abuses in this space," Gurbir Grewal, director of the agency's enforcement division, said in a statement.

Many crypto leaders have turned sharply critical of Gensler's approach to the industry since he took office a year ago. They say instead of developing clear rules for digital assets, he has pursued a policy of regulation by enforcement, defining wrongdoing after the fact and then seeking to punish it. Gensler addressed that critique in a November speech, saying, "I just call it 'enforcement.'"

Top crypto companies have responded by pushing Congress to give more oversight of the industry to the Commodity Futures Trading Commission, which they view as friendlier than Gensler's SEC.

Gensler has not backed down. He announced plans last month to expand the SEC's reach into crypto markets, including by starting to register and regulate crypto trading platforms. In a speech describing the plans, he said the agency is seeking to partner with the Commodity Futures Trading Commission to jointly oversee platforms offering both crypto-based securities and commodities, although policymakers are still debating how to classify digital assets.

Print Headline: SEC expands its crypto-fraud team

ADVERTISEMENT

Sponsor Content

ADVERTISEMENT
ADVERTISEMENT