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The SEC said that the step toward team expansion will help them build greater vigilance over other emerging crypto verticals such as DeFi, NFTs, stablecoins, etc.
Market analysts in the crypto space have been expecting greater regulatory involvement this year in 2022. On Tuesday, May 3, the US Securities and Exchange Commission (SEC) said that it is expanding its crypto investigation and enforcement team.
As per the announcement, the US SEC shall be adding 20 more positions to the Crypto Assets and Cyber Unit. As a result, the SEC crypto team will nearly double from 30 to 50. Thus, it will help to increase the agency’s reach to prosecute any security law violations relating to new crypto products.
The securities regulator highlighted some key areas in focus wherein they would put their focus. This includes crypto exchanges, decentralized finance (DeFi) projects, lending and staking services, NFTs, stablecoins, etc. Speaking of this development, SEC Chair Gary Gensler said:
“As more people invest in crypto, it is increasingly important to dedicate more resources to protecting them. The Division of Enforcement’s Crypto Assets and Cyber Unit has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets. 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”.
Investor Protection Is the Main Concern
The US SEC has been clear on its goal of investor protection and preventing fraud. With the fast growth of the crypto market, cases for fraud and abuse have been on the rise. The rug pull kind of scams have been getting quite prominent in the crypto space wherein operators draw big investments by promising big returns and then simply abscond with the money.
In its recent report, the SEC showed interest in crimes related to staking and lending platforms. The agency is also concerned of the rising crimes in DeFi, stablecoins, and NFTs. The SEC said that the newly-created staff positions will include trial counsels, investigative attorneys, and fraud analysts. SEC’s enforcement director Gurbir S. Grewal said:
“Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space. The bolstered Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges.”
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