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SEC Announces Cyber and Emerging Technologies Unit

February 26, 2025

On Feb. 20, the Securities and Exchange Commission announced the creation of the Cyber and Emerging Technologies Unit (CETU) stating its focus will be on “combatting cyber-related misconduct and to protect retail investors from bad actors.” CETU will replace the Crypto Assets and Cyber Unit created in 2017. The CETU will consist of approximately 30 fraud specialists and attorneys across multiple SEC offices.

In 2024, the SEC imposed monetary penalties of approximately $5 billion resulting from cryptocurrency-related enforcement actions and imposed the largest cryptocurrency-related monetary penalty in a crypto-related enforcement action in SEC v. Terraform Labs PTE Ltd. et al. According to Mark Uyeda, the Acting Chairman of the SEC, the “unit will not only protect investors, but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow.”

The SEC’s press release indicates that the focus of the CETU will be to combat misconduct as it relates to securities transactions in the following areas:

  • Fraud committed using emerging technologies, such as artificial intelligence and machine learning
  • Use of social media, the dark web, or false websites to perpetrate fraud
  • Hacking to obtain material nonpublic information
  • Takeovers of retail brokerage accounts
  • Fraud involving blockchain technology and crypto assets
  • Regulated entities’ compliance with cybersecurity rules and regulations
  • Public issuer fraudulent disclosure relating to cybersecurity

This new enforcement body in combination with the recent action by the SEC clarifying the crypto asset classification rules and updates to accounting guidelines for cryptocurrency will likely lead to a new regulatory landscape and movement within the crypto market. For more information on this please reach out to Clark Hill’s team of attorneys having experience in these matters standing ready to assist.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.

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