The U.S. Securities and Exchange Commission (SEC) has established the Cyber and Emerging Technologies Unit (CETU) to combat fraud involving emerging technologies. This unit replaces the previous crypto division and is designed to protect investors from cyberattacks and abuse involving artificial intelligence and blockchain.
The CETU will focus on addressing misconduct related to emerging technologies, including fraud involving artificial intelligence, machine learning, and blockchain technologies. Another key area of focus is monitoring cyberattacks aimed at stealing confidential information or taking over retail investors' trading accounts.
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Leadership and Collaboration
Laura D’Allaird, the newly appointed head of CETU, brings extensive experience in cybersecurity and financial technology. Under her leadership, the unit will work closely with the Crypto Task Force, led by Commissioner Hester Peirce. This collaboration is intended to ensure that the SEC effectively allocates its enforcement resources, protecting investors while also fostering innovation.
The CETU will focus on several core areas:
- Fraud involving emerging technologies: Investigating cases where technologies such as artificial intelligence and machine learning are used for fraudulent activities.
- Abuse of online platforms: Detecting fraud conducted via social media, the dark web, or fake websites.
- Cyberattacks: Combating hacking attempts aimed at obtaining non-public information or taking over retail investors' trading accounts.
- Fraud related to blockchain and crypto assets: Ensuring that regulated firms adhere to applicable cybersecurity rules and regulations.
- Disclosure of cybersecurity risks: Reviewing the transparency of companies regarding their cybersecurity measures and risks.
No Lawless Industry
Under Donald Trump’s administration, the SEC scaled back its strict regulation of the crypto market. Specialized enforcement units were downsized, and new leadership figures with a more open stance toward the industry implemented a more liberal policy. However, this does not mean a lawless space has been created for fraudsters. Influencers who have deceived their followers in recent weeks, in particular, should remain cautious.
“Under Laura’s leadership, this new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce. Importantly, the new unit also enables the SEC to prudently deploy its enforcement resources. The unit will not only protect investors but also promote capital formation and market efficiency by paving the way for innovation. It will track down those who attempt to exploit innovation to harm investors and undermine trust in new technologies.” - Mark T. Uyeda, Acting Chair of the SEC
