US SEC Launches New Unit To Protect Investors From Crypto And AI Fraud

The US Securities and Exchange Commission (SEC) announced on Monday the establishment of the Cyber and Emerging Technologies Unit (CETU), aimed to combat misconduct in the crypto and artificial intelligence (AI) sectors.

SEC’s Strategic Move To Combat Cyber Misconduct

According to an official release from the SEC, the CETU will replace the previous Crypto Assets and Cyber Unit and will be led by Laura D’Allaird. 

The unit will consist of approximately 30 specialized attorneys and fraud experts drawn from various SEC offices, bringing a wealth of experience in fintech and cybersecurity to the forefront of regulatory efforts. 

Acting SEC Chairman Mark T. Uyeda emphasized the importance of this new unit, stating that it will complement the work of the Crypto Task Force led by Commissioner Hester Peirce. 

Chair Uyeda noted that the CETU’s mission is not only to protect investors but also to promote capital formation and market efficiency, thereby fostering an environment conducive to innovation.

The CETU will focus on a variety of priority areas concerning cyber-related misconduct. This includes addressing fraudulent activities that utilize advanced technologies such as AI and machine learning, as well as investigating schemes that employ social media platforms, the dark web, or deceptive websites. 

The unit will also target hacking incidents aimed at acquiring material nonpublic information and will combat unauthorized access and manipulation of retail brokerage accounts.

Additionally, the CETU will investigate fraudulent practices involving blockchain technology and crypto assets while ensuring that regulated entities adhere to existing cybersecurity rules and monitoring public issuers for misleading cybersecurity disclosures.

Steps To Enhance Crypto Oversight

This initiative follows the SEC’s earlier establishment of the crypto task force on January 21, 2025. Under the leadership of Commissioner Hester Peirce, the Task Force aims to create a comprehensive regulatory framework for crypto assets, signaling a proactive approach by the SEC to engage more meaningfully with the sector. 

Commissioner Peirce has noted that the success of the Task Force hinges on collaboration with a diverse range of stakeholders, including investors, industry participants, and academics. 

She urged members of the crypto community to actively participate in discussions and provide input through various channels, such as public comments and roundtables. 

The SEC’s dual approach, combining the efforts of the newly formed CETU and the crypto task force, marks a pivotal shift in regulatory oversight under the new President Donald Trump administration, which aims to clarify regulatory boundaries, establish feasible registration paths, and ensure sensible disclosure frameworks. 

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