US financial regulator adds 20 full-time staff to cryptocurrency enforcement unit, also targets fraud in decentralised finance, NFTs, stablecoins
The US financial regulator has added 20 dedicated positions to its unit responsible for enforcement in cryptocurrency and related markets, as it pushes to curb fraudulent activities in the booming market.
The Securities and Exchange and Commission said it would rename the division the Crypto Assets and Cyber Unit and that it would now have a total of 50 staff.
“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,” said SEC chair Gary Gensler.
The agency said the unit would focus on preventing fraud that makes use of crypto asset offerings, crypto asset exchanges, crypto asset lending and staking products, decentralised finance platforms, non-fungible tokens (NFTs) and stablecoins.
Crypto trading often bypasses stringent regulatory control by operating in offshore jurisdictions or in regulatory gray areas.
Gensler has indicated for months that the agency wants to expand its activities in the crypto sector and said in September that this would require “a lot more people”.
In the meantime mainstream interest in the crypto market has skyrocketed, including a jump in private equity investment in the area, known as web3.
In March, for instance, start-up Yuga Labs raised some $450 million (£340m) in a funding round led by Andreessen Horowitz to build Otherside, a decentralised metaverse built around its popular NFT offerings such as the Bored Ape Yacht Club.
Over the weekend Yuga Labs raised hundreds of millions of dollars by selling virtual tokens representing land in the upcoming virtual world, which could only be purchased using its cryptocurrency, ApeCoin.
Venture capital in crypto projects such as blockchain-based apps and cryptocurrency-based platforms totalled $10bn worldwide in the first quarter of this year, more than double the level for a year ago, according to Pitchbook.
The full-year totals for such investment fose from $3.7bn in 2019 to $5.5bn in 2020 and then $28bn in 2021.
Investment has continued to pour in in spite of a slump in the price of Bitcoin, which is down about 16 percent this year, and in the tech-heavy Nasdaq, which is down about 21 percent.