US SEC Establishes Cyber and Emerging Technologies Unit to Combat Crypto and Cyber Fraud
Key Highlights:
- CETU replaces the Crypto Assets and Cyber Unit, expanding its focus to AI and cyber fraud.
- Led by Laura D’Allaird, the unit consists of 30 specialists targeting digital asset misconduct.
- SEC aims to strengthen oversight on blockchain, AI-related securities fraud, and cybersecurity compliance.
SEC Launches Cyber and Emerging Technologies Unit (CETU)
The U.S. Securities and Exchange Commission (SEC) has introduced the Cyber and Emerging Technologies Unit (CETU) to address fraud in the digital asset and cybersecurity sectors. Replacing the Crypto Assets and Cyber Unit, CETU will focus on protecting retail investors from risks associated with cyber fraud and emerging financial technologies.
Laura D’Allaird has been appointed as the chief of CETU, overseeing a team of 30 fraud specialists and attorneys from various SEC offices. This unit will collaborate with the Crypto Task Force, led by Commissioner Hester Peirce, to enhance enforcement efforts in the crypto and blockchain space.
CETU to Target Cyber and Crypto Misconduct
The SEC confirmed via an X post that CETU’s primary objectives include investigating fraud involving securities transactions, AI misuse, fraudulent social media schemes, and cyber-hacking incidents. Additionally, CETU will focus on fraud related to blockchain technology and digital assets.
Acting SEC Chairman Mark Uyeda emphasized that CETU’s role is not only to protect investors but also to promote market efficiency and support innovation.
“This unit will not only safeguard investors but will also create a regulatory framework that allows innovation to thrive,” Uyeda stated.
Strengthening Cybersecurity Regulations
Beyond fraud detection, CETU will also enforce cybersecurity compliance among regulated financial entities. The unit will ensure that brokerage firms, investment advisers, and public issuers adhere to SEC cybersecurity policies to prevent cyber threats.
With a rise in hacking incidents targeting financial institutions, the SEC has increased cybersecurity oversight, particularly focusing on retail brokerage account breaches and unauthorized transactions. CETU is expected to play a crucial role in enforcing these security measures.
SEC’s Evolving Crypto Oversight Under New Leadership
The launch of CETU coincides with regulatory shifts under the new administration. While the Biden-era SEC maintained a strict enforcement stance on crypto, the Trump administration has introduced a more balanced regulatory approach, fostering industry growth while ensuring investor protection.
In a recent legal development, the SEC withdrew its appeal in a lawsuit against its dealer rule expansion, a case originally filed by the Blockchain Association and the Crypto Freedom Alliance of Texas in 2024. Meanwhile, the SEC has requested an extension in its ongoing case against Coinbase, delaying its response to Coinbase’s request for an interlocutory appeal.
As the SEC navigates these regulatory changes, the Ripple case remains a key focus, though no pause requests have been made. Legal experts believe that the SEC is prioritizing cases with immediate deadlines, affecting its approach to ongoing crypto lawsuits.
