The Securities and Exchange Commission (SEC) has embarked on a hiring spree to combat cryptocurrency fraud. The agency’s Crypto Assets and Cyber Unit will add 20 staff positions in the coming weeks. It’s a move that comes as the SEC’s crypto-related enforcement activities are booming.
The SEC has made no secret of its anti-crypto stance and has been aggressive in pursuing criminal prosecutions. In the first nine months of the year, a number of high-profile cases have resulted in criminal charges.
SEC Chair Gary Gensler has consistently argued that digital tokens and crypto investments are securities and must be registered with the Securities and Exchange Commission. He has also called for more exchanges to register with the SEC.
In the past year, the SEC has brought a number of enforcement actions against cryptocurrencies and the crypto industry, including charges against Telegram, Kik, BlockFi, LBRY and Coinbase for alleged violations of federal securities laws.
These alleged violations of federal securities laws have led to the arrest of numerous individuals. In addition to bringing criminal charges, the SEC has resorted to civil enforcement action, which reportedly results in significant fines and restitution.
Despite the SEC’s efforts to regulate and enforce cryptocurrency laws, there has still been a great deal of fraud in the crypto space. In fact, blockchain analysis firm Chainalysis has reported that more than $14 billion in illicit crypto movements occurred last year.
This figure is expected to rise, as crypto markets have continued to suffer losses. The SEC has been particularly active in enforcing fraud in the crypto space, and it’s been responsible for multiple notable victories against scammers.
SEC Chair Gary Gensler said that his agency “is ready to prosecute anyone who sells unregistered securities to investors in the United States.” Earlier this year, the SEC issued a Wells Notice against Coinbase for allegedly violating the securities law by offering and selling its Lend program without properly registering it.
In addition, the SEC recently referred the Terra stablecoin to the Justice Department for investigation, as well as the Solana Stablecoin exchange, Saber Labs, for operating a pyramid scheme that used newly-invested funds to pay off old investors.
While these enforcement actions have been relatively successful in thwarting fraud, there are many other issues in the crypto space that are not so easily addressed by regulators. These include the use of fake jobs, pump-and-dump schemes and scams related to currency conversion, which are all too common in the crypto space.
These scams are often international, so it can be difficult to find the perpetrators. They typically involve a large group of investors who have all invested in the same scheme.
Scammers usually post fake job offers on job sites that they claim will help you invest in crypto. They also might send you a fake check to deposit in your bank account. They then ask you to withdraw some of the money, buy a few cryptocurrencies and then transfer them to a “client” on a crypto exchange.