The Securities and Exchange Commission (SEC) is hiring a new wave of staffers to combat cryptocurrency fraud. The agency recently announced the addition of 20 new investigators and 50 new litigators to its Crypto Assets and Cyber Unit, which will eventually be home to 50 dedicated positions. With a new wave of investors turning to crypto markets, the SEC believes it is important to dedicate resources to protect these markets. The organization has also expanded its efforts to protect stablecoins, which are digital currencies tied to the U.S. dollar.
20 new investigators
The Securities and Exchange Commission (SEC) recently hired 20 new investigators to help crack down on cryptocurrency fraud. These new hires include fraud analysts, supervisors, and investigative staff attorneys. They will focus on crypto asset offerings, lending, and decentralized finance platforms. They will work in Washington, DC, and several regional offices.
The SEC’s expansion of its crypto enforcement efforts follows Gensler’s speech announcing increased enforcement and regulation of the $2 trillion crypto market. At the same time, Gensler announced the agency will almost double the size of its team, which includes investigators, trial counsel, and supervisors. The announcement comes as the agency seeks to increase its oversight of the crypto markets and protect consumers.
With the new staff, the SEC will have more resources to investigate cryptocurrency fraud and protect investors. In the last year alone, the SEC has brought 80 enforcement actions involving fraudulent or unregistered crypto assets. Most of the cases involved issuance of new tokens.
50 new litigators
The US Securities and Exchange Commission (SEC) has added 50 new litigators to its roster to fight cryptocurrency fraud. These lawyers will be based in Washington, DC and other regional offices. Many of them have expertise in banking, securities, mergers and acquisitions, and technology. Several have experience in cybersecurity and data privacy.
The SEC already has a high-powered cyber unit, but the agency has stepped up its efforts to expand its regulatory power over the industry. In September, it created a new unit called the Crypto Assets and Cyber Unit. This unit will focus on bringing the cryptocurrency industry under federal regulation. Its chief goal is to protect investors and consumers.
The SEC has also hired 20 new enforcement lawyers to bring cases against crypto companies. These new attorneys will help the agency continue to enforce its existing laws and further its enforcement fences around these companies. The SEC’s hiring of these new attorneys reflects the SEC’s belief that the law is sufficiently clear to protect investors.
Forsage crypto project
The Forsage crypto project launched in January 2020, allowing retail investors to transact on blockchains. It quickly became the most popular decentralized application on Ethereum, consuming much of the network’s on-chain bandwidth. The use of Forsage was so high that the gas rates for Ethereum increased dramatically. In July 2020, approximately $20 million was sent to Forsage in a single day.
The Philippine Securities and Exchange Commission issued a public warning in June 2020 stating that the Forsage operation was fraudulent. The Securities and Insurance Commissioner of Montana also issued a cease and desist order against Forsage. Despite the allegations, the defendants continued to promote the scheme through social media sites.
Ethereum blockchain transition to proof-of-stake consensus mechanism
When Vitalik Buterin published the whitepaper for Ethereum in 2013, the community struggled to come up with a proof-of-stake consensus mechanism. In the years leading up to the launch of Ethereum, the community worked to come up with a proof-of concept called Casper the Friendly Finality Gadget.
While it’s not clear how the proof-of-stake consensus mechanism will be implemented in the future, it’s an important step for Ethereum to take. This new model will allow the blockchain to handle many different types of transactions and future innovations. The proof-of-stake consensus mechanism is designed to maximize speed and minimize fees.
The proof-of-stake system works by relying on a network of “validators” who stake a certain amount of ether. In late July, this amount was around $72,000. The algorithm will then select validators to validate new blocks. The more ether staked by the validators, the higher their chances of being chosen.
Expanded cyber unit to protect crypto investors
The Securities and Exchange Commission (SEC) is expanding its staff to protect the crypto investor community. The agency plans to add about 20 new full-time positions to its Crypto Assets and Cyber Unit, which already has around 30 people. The expanded unit will focus on investigating potential securities law violations in the crypto ecosystem. In addition, it will investigate decentralized finance platforms, crypto exchanges, and staking products. It will also focus on crypto-related cyberthreats to critical financial infrastructure.
The proposed rule changes would require issuers to report any cyber incident to the SEC within four business days. They would also require issuers to update disclosures about past cybersecurity incidents. These changes will provide the expanded Cyber Assets and Cyber Unit with more tools to fight cybersecurity breaches. Stay tuned for more updates about this evolving regulatory environment!