SEC forms Cyber and Emerging Technologies Unit to combat crypto and AI-related fraud
New SEC unit seeks to protect investors and promote innovation, tackling threats from AI to blockchain scams.
Key Takeaways
- The SEC has created the Cyber and Emerging Technologies Unit led by Laura D'Allaird to combat cyber-related misconduct.
- CETU will focus on fraud involving AI, social media, dark web, and blockchain technology to protect retail investors.
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The US SEC established on Thursday the Cyber and Emerging Technologies Unit (CETU) to combat cyber-related misconduct and protect retail investors from emerging technology threats. Led by Laura D’Allaird, the CETU replaces the agency’s previous Crypto Assets and Cyber Unit and comprises approximately 30 fraud specialists and attorneys drawn from across SEC offices.
The move signals the SEC’s broader regulatory push in the face of rapidly evolving technologies. The newly formed unit will prioritize a range of cyber-related threats impacting the financial industry.
Key focus areas include the growing use of artificial intelligence and machine learning in fraudulent schemes, scams perpetrated through social media, the dark web, or deceptive websites, and hacking activities aimed at acquiring material nonpublic information.
The CETU will also address the rising problem of retail brokerage account takeovers, fraud involving blockchain technology and crypto assets, cybersecurity compliance by regulated entities, and fraudulent disclosures by public companies concerning cybersecurity incidents.
“Under Laura’s leadership, this new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce,” said Acting Chairman Mark Uyeda. “The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow. It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”
D’Allaird took on the role of Co-Chief of the Crypto Assets and Cyber Unit in the SEC’s Division of Enforcement last December, alongside Mark Sylvester. Prior to this position, she served as counsel to SEC Commissioner Jaime Lizárraga.
D’Allaird is responsible for overseeing the SEC’s enforcement efforts related to crypto and cybersecurity issues. Her appointment comes at a time of major changes in SEC regulation of crypto, with the agency shifting towards more clear guidelines and practical registration processes.
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