The SEC aims to nearly double its crypto team to protect investors and combat violations in the crypto industry. As per reports, the SEC’s Crypto Assets and Cyber team, which is part of the Enforcement Division, is expected to grow from 20 individuals to 50.
The 20 new hires will include investigative staff attorneys, trial analysts, and fraud analysts, per the same report. According to SEC Chair Gary Gensler and Enforcement Director Gurbir Grewal, the appointments were long overdue. These employees, they claim, are critical to the regulation of Wall Street’s newest and most popular business.
SEC in Action
In a statement, Gensler said the SEC’s crypto unit has successfully prosecuted dozens of people who try to take advantage of cryptocurrency investors.
Individual retail investors are the most vulnerable to deception.
Individual retail investors, according to Grewal, make up the majority of victims of crypto-related securities fraud. He said cyber dangers continue to pose existential challenges to the banking sector in the United States.
This news comes after Gensler informed legislators more than eight months ago that his agency required more people to handle the pace of new and complicated financial technologies. He claimed that the United States lacked adequate investor protection in crypto financing, issuance, trading, or lending.
Consumer Protection in Web 3.0
This announcement comes as the Securities and Exchange Commission (SEC) continues to press for stronger regulations for the digital asset business. The government recently stated that it intends to investigate alleged securities violations in the non-fungible token (NFT) market. According to reports, the regulator’s Enforcement Unit has been issuing subpoenas for more information on fractional NFTs.
Recent Crypto Frauds
We have witnessed several crypto-related frauds in recent times. The North American Securities Administrators Association (NASAA) predicts that cryptocurrencies and digital assets will be the top threat to investors in 2022. The association also warned investors that the market could be nothing more than public-facing fronts for Ponzi schemes and other frauds before jumping into the crypto craze.
In 2021, bitcoin scammers took in approximately $7.7 billion in cryptocurrencies from victims, an increase of 81% over the previous year.
Nearly $1.1 billion of the $7.7 billion was ascribed to a single operation that reportedly targeted Russia and Ukraine, according to Blockchain analysis firm Chainalysis.
Major Crypto Frauds in India
Amit Bhardwaj, a businessman, defrauded approximately 8,000 people out of nearly Rs 2,000 crore in 2018. He concocted a pyramid scheme in which he enticed investors to pay him Bitcoins in exchange for increased earnings.
He proposed an 18-month contract with a ten percent return. Amit Bhardwaj broke his pledge, failed to return, and fled the country. In March 2018, the Pune Police arrested Amit and seven people linked him.
The Morris coin fraud, the most recent crypto fraud, was discovered in 2022. A website advertising a phony cryptocurrency called Morris coin is accused of defrauding over 900 investors out of Rs 1,200 crore. They had put money into the phony cryptocurrency’s ‘initial offering.’