The SEC is adding more agents as it ramps up crypto enforcement
The Chairman of the Securities and Exchange Commission, Gary Gensler, has called crypto the “Wild West”. Ting Shen—Bloomberg via Getty Images
The Securities and Exchange Commission is adding agents to its crypto-focused division as it continues to ramp up enforcement.
The agency announced in May that it would add 20 employees to its Crypto Assets and Cyber Unit, bringing the total number of people in the unit to 50. It has nearly filled all of those slots, CoinDesk reported, and plans to add even more employees to the unit in the future, although it was not stated how many.
In a May statement, the agency claimed that its Crypto Assets and Cyber Unit had filed more than 80 enforcement actions against unregistered crypto-asset offerings and platforms since it was established in 2017, resulting in more than $2 billion in financial relief.
The SEC did not immediately respond Fortuneits request for comment.
The additions to the crypto-specific entity come as the SEC and Chairman Gary Gensler have brought a series of enforcement actions against the crypto industry in recent months. Meanwhile, leaders in the space, such as Coinbase CEO Brian Armstrong, have called for a “clear rulebook” on cryptoassets, and have criticized Gensler’s approach to regulation by enforcement.
Last month, the agency settled US-based crypto exchange Kraken for $30 million over allegations that its “staking” product offered clients unregistered securities. While Kraken agreed to shut down the product, it did not deny or admit to the agency’s allegations.
The SEC also indirectly hit top crypto exchange Binance last month by saying it planned to sue Paxos, the US-based creator of BUSD, the stablecoin that uses its name. The agency said in a notice to Paxos that the BUSD stablecoin is an unregistered security.
It also cracked down on Terraform Labs, the company run by Do Kwon, whose cryptocurrencies, stablecoin TerraUSD and Luna, failed spectacularly last year, causing billions in investor losses. The SEC charged Terraform Labs and Kwon with fraud and selling unregistered securities.
Gensler has continued to increase the pressure on the industry in the wake of FTX’s bankruptcy late last year. The SEC chairman has previously said that crypto is “the Wild West” and that most digital tokens are securities.
At a conference on Thursday, Gensler added that crypto exchanges should also not be considered qualified custodians for the storage of assets, including cryptocurrencies, and warned investment advisers to be wary of working with them.
