The US Securities and Exchange Commission (SEC) has almost doubled its human resources for the Cyber Unit Department. The regulator has allocated 20 additional slots to the existing 30 days to bring the total human resources in the unit to 50.
The reorganization also entails renaming the Cyber Unit to Crypto Assets and Cyber Units. The new unit will form part of the Division of Enforcement, whose mandate is to enforce policies, standards, and ethical practices in the financial markets.
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The Commission is Building Trust in The Financial Market
According to SEC Chair Gary Gensler, the US has the most advanced capital market because of investor confidence. Gensler confirms that the US Crypto Market is growing in leaps and bounds, and it is necessary to protect Crypto investors from scams and other illicit activities.
There have been over 80 class actions against unregistered ICO scam perpetrators and other fraudulent Crypto platforms since its founding in 2017. The Cyber Unit has recovered $2 billion from the Crypto fraudsters.
The enlarged unit can dispense justice to victims of the scams and reinstate the integrity of Crypto Market operations.
Monitoring and Review will be Perpetual
In addition to responding to emerging issues in the Crypto market. The regulator will identify disclosures and cybersecurity risks in areas such as: –
• Crypto asset exchanges
• Decentralized finance (DeFi) platforms
• Crypto asset lending and staking products
• Non-fungible tokens (NFTs)
• Crypto asset offerings
• Stablecoins
Hence failure to maintain adequate cybersecurity controls by any member registered by the SEC will attract a class action. All Crypto services providers will be required to declare all cyber security breach incidences to the regulator. Moreover, all providers will have to establish and maintain a risk management strategy to shield investors and users of their platforms from Cyber risks.
Crypto Investor Protection Is a Global Phenomenon
The US SEC move to protect Crypto investors is not isolated. Several regulators worldwide, such as Argentina’s Comisión Nacional de Valores (CNV), are creating a framework to protect consumers of Crypto market products.
The UAE’s Abu Dhabi Global Market FSRA is also calling for stakeholders’ contributions as it creates a policy to regulate DeFi operations in the country. The motivation is not only to grow the Crypto markets in their respective countries but to mitigate the risks inherent to Digital Markets as the new technology disrupts and integrates with the traditional financial market.
The Cryptocurrency market capitalization is $1.7 trillion. Although there is a prevailing bearing sentiment, it is evident that the value of Cryptos is stabilizing and becoming less susceptible to shocks or investor manipulation.