The United States Securities and Exchange Commission (SEC) announced Tuesday that it would nearly double the number of personnel responsible for safeguarding investors in cryptocurrency markets.
As per the announcement, the SEC’s Cyber Unit, which includes the Crypto Assets and Cyber team, will hire 20 new people for 50 dedicated positions.
The SEC stated that the 20 hires would include investigative staff attorneys, trial lawyers and fraud analysts. Chair Gary Gensler praised the appointments as long overdue and essential to overseeing one of Wall Street’s newest and most popular sectors.
This is welcome news to many who have been concerned about the potential for market manipulation and other fraudulent activities in the crypto space. In recent months, the SEC’s crypto unit “has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets,” Gensler stated, adding:
“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.”
However, the news hasn't gone down well with "Crypto Mom" SEC commissioner Hester Peirce. In a tweet responding to the SEC's announcement that new crypto cops will be added, she pointed out that the agency is "a regulatory agency with an enforcement division" rather than an enforcement organization, and asked why her employer was "leading with enforcement" in cryptocurrency?"
Pierce is one of the most vocal advocates for crypto regulation at the federal level in the United States. Rather than focusing on enforcement, she has advocated for crypto regulation. In August, Peirce slammed the SEC for a $10 million settlement with crypto exchange Poloniex in a public statement, emphasizing the opaque regulatory environment that cryptocurrencies must navigate in the United States.
SEC director of enforcement Gurbir S. Grewal said that the majority of crypto-related securities fraud victims are individuals. According to Grewal, cyber-attacks continue to pose an “existential” risk to the U.S. financial system. “The bolstered Crypto Assets and Cyber Unit,” he said, will be at the forefront of safeguarding investors and the broader markets.
The announcement comes after nearly eight months of pleading for more personnel. Gensler reportedly told lawmakers that his agency needed much more staff to confront the ever-increasing number of new financial technologies.
Last month, Gensler emphasized that the SEC’s protections for investors of traditional assets should also apply to crypto traders. In a come in and talk to us approach, Gensler has urged crypto firms with securities to register in order to safeguard investors. The lack of regulatory clarity in the United States, which is affected by various authorities including the SEC, Commodity Futures Trading Commission and Financial Crimes Enforcement Network, has been criticized by several cryptocurrency firms.