The Securities and Exchange Commission (SEC) announced Tuesday it would double the size of its cryptocurrency fraud department, a move to curb fraudulent activities in the hot digital space.
The SEC plans to add 20 positions to the Crypto Assets and Cyber Unit in the Division of Enforcement. The unit will increase to 50 dedicated positions.
"The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them," SEC Chair Gary Gensler said in a statement.
The unit was created in 2017 and had been aggressively monitoring the $1.7 trillion unregulated industry for fraud.
The expansion of the unit will allow agents to investigate securities law violations related to:
Crypto asset offerings;
Crypto asset exchanges;
Crypto asset lending and staking products;
Decentralized finance ("DeFi") platforms;
Non-fungible tokens ("NFTs"); and
The expanded SEC oversight comes after Gensler in April said the agency weighed how it could increase investor protections.
According to blockchain data firm Chainalysis, crypto fraud in 2021 hit a record high of $14 billion. That's almost twice the $7.8 billion taken by scammers in 2020.
The SEC's crypto unit "has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets," Gensler said.
"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 added.
"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," Gurbir S. Grewal, Director of the SEC's Division of Enforcement, said at the end of the statement.