On February 20, 2025, the US Securities and Exchange Commission (SEC) announced the creation of a new enforcement unit – the Cyber and Emerging Technologies Unit (CETU). The SEC’s announcement made clear that the new unit would replace the existing Crypto Assets and Cyber Unit, which was created in 2017, substantially expanded in 2022, and focused on enforcement actions “related to fraudulent and unregistered crypto asset offerings and platforms” to the tune of billions of dollars in related monetary relief.
Acting SEC Chair Mark Uyeda explained that the new CETU was designed to complement the SEC’s recently announced Crypto Task Force, which in turn is “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.” Specifically, the CETU will focus on “combat[ting] misconduct as it relates to securities transactions” in the following areas:
- “Fraud committed using emerging technologies, such as artificial intelligence and machine learning
- Use of social media, the dark web, or false websites to perpetrate fraud
- Hacking to obtain material nonpublic information
- Takeovers of retail brokerage accounts
- Fraud involving blockchain technology and crypto assets
- Regulated entities’ compliance with cybersecurity rules and regulations
- Public issuer fraudulent disclosure relating to cybersecurity”
As discussed in this January 22 blog post, while the SEC may be shifting away from alleged registration violations, crypto companies should still be mindful of litigation risks, particularly in cases involving alleged fraud – including from private plaintiffs and state attorneys general.
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