The Securities and Exchange Commission is replacing its enforcement unit devoted to misconduct in the cryptocurrency markets, the latest sign of the regulator's more friendly approach to digital assets.
In its stead, there will be a smaller team with a broader mandate to combat all kinds of cyber-related fraud, including through the use of social media platforms, artificial intelligence, machine learning and blockchain technologies, the agency said Thursday.
Laura D'Allaird, formerly the co-chief of the crypto unit, will lead the new group of about 30 fraud specialists and attorneys across multiple SEC offices, the SEC said.
"The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow," Acting SEC Chairman Mark Uyeda said in a statement. "It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies."
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The new unit will allocate 20 fewer staff members compared with the group created in 2022 to investigate fraud in the cryptocurrency markets and financial cybercrimes. Former Chair Gary Gensler became a public foil for crypto boosters, bringing about 100 related enforcement actions during his tenure at the agency and regularly questioning coins' value.
"I've never seen a field that's so much wrapped up in sentiment and not so much about fundamentals," Gensler said in a January interview with Bloomberg TV.
The day after President Donald Trump's inauguration, the agency announced the formation of a crypto-focused task force, separate from its enforcement division, to create a "comprehensive and clear" framework to regulate the market.
