The new Cyber and Emerging Technologies Unit (CETU) replaces the Crypto Assets and Cyber Unit as part of efforts to combat AI fraud and protect retail investors.
Tackling Digital Scams and Fraud Head On
The US Securities and Exchange Commission (SEC) has unveiled a new Cyber Unit in a bid to protect retail investors from digital scams and fraud involving artificial intelligence (AI). As part of its latest regulatory reforms, the SEC has replaced the Crypto Assets and Cyber Unit with the Cyber and Emerging Technologies Unit (CETU).
Led by Laura D’Aillard, the CETU will consist of approximately 30 fraud specialists and attorneys across multiple SEC offices, representing a 40% reduction in staff compared to its predecessor. In a statement, Acting SEC Chairman Mark T. Uyeda said: “Under Laura’s leadership, this new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce. Importantly, the new unit will also allow the SEC to deploy enforcement resources judiciously.
“The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow”, he added. “It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”
Investigation of Illicit Practices Involving Blockchain, Crypto Assets and Hacking
The CETU has been set up to tackle the rise in AI and machine learning fraud, along with online scams conducted through social media, the dark web, or misleading websites specifically designed to commit fraud. Alongside this, it will investigate the growth in retail brokerage accounts takeovers, fraud involving blockchain and crypto assets, and the illicit practice of hacking to obtain material non-public information.
Other key priorities for the CETU include ensuring that regulated entities comply with cybersecurity standards, while combating fraudulent disclosures by public companies regarding cybersecurity-related matters.
This decision signals a clear shift in direction during Donald Trump’s second term in office, scaling back the 50-person Crypto Assets and Cyber Unit, which launched in 2022 under the Biden presidency. The former unit played a key role in the previous administration’s efforts to regulate emerging digital and cryptocurrency markets, which some government officials believed posed a major risk to financial stability due to rampant fraud.
The SEC’s announcement came on the same day that Trump reiterated his desire to make the US the “crypto capital of the world”, attributing bitcoin’s record highs to his commitment to achieving this bold objective.
In comments made during a speech at a Miami conference, Trump said:
“Bitcoin has set multiple all-time highs because everyone knows I’m committed to making America the crypto capital. We want to stay at the forefront of everything, and one of them is cryptocurrency.”
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