SEC to hire people for cryptocurrency fraud squad

Hailey Chin

The Securities and Exchange Commission is hiring more people for its Crypto Assets and Cyber Unit.

Founded in 2017, The Crypto Assets and Cyber Unit are part of the SEC’s enforcement division and are responsible for protecting investors in cryptocurrency markets from cyber-related threats.

“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,” SEC Chair Gary Gensler said in a press release.

The relevancy of such a division is vital in an industry that is, as Gensler said, “rife with fraud and abuse.”

Cryptocurrency crime hit an all-time high in 2021, as news reports found that scammers stole nearly $14 billion worth of cryptocurrency.

A more specific example of a cryptocurrency crime was the recent scam inspired by “Squid Game,” a popular Korean drama. In late October, a cryptocurrency project, dubbed “Squid,” was launched.

Squid — as explained by Katherine Wooler, the managing director at U.K. cryptocurrency wealth platform Dacxi — “harnessed the zeitgeist for the Netflix series Squid Game by apparently offering obsessed gamers access to a play-to-earn game.”

This scam utilized the popularity of “Squid Game” to draw in approximately 41,000 victims with an immersive online game. Investors claim that “the developers disappeared after the currency skyrocketed in price and seemingly cashed out with more than $3 million,” according to NextAdvisor.

The importance of the existence of the “fraud squad” is evident. The SEC plans to expand the unit in response to this increase in cryptocurrency crimes.

As it is a field that many people are relatively unfamiliar with, there will be people who take advantage of the naivety of first-time investors who are blinded by the allure of cryptocurrency.

“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,” Gensler said.

Other agencies, such as the FBI, have joined the SEC in addressing this issue, but some people feel that more action needs to be taken to counteract these crimes.

“I think you’re going to see more headlines and a lot more of the types of attacks that you’ve seen here before things change,” Ben Richmond, the CEO and founder of CUBE, told CyberScoop.

Companies need to place an emphasis on cybersecurity as this is an issue that affects people from all walks of life.

Many criticized the SEC and felt that the organization rushed when it acted before regulators could have a firm grasp of the situation.

“The SEC is a regulatory agency with an enforcement division, not an enforcement agency. Why are we leading with enforcement in crypto?” SEC Commissioner Hester Pierce tweeted.

Regulation has begun to catch up to the SEC. On March 9, President Joe Biden signed an executive order that targets cryptocurrency.

The order states that consumers, investors and businesses must be protected. Additionally, the ruling clarifies the United States’ support for technological developments and the responsible use of digital assets.