US Securities Regulators Expand and Restructure Dedicated Team to Investigate Illegal Activities in the Cryptocurrency Market

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] On the 3rd (local time), CNBC and other media reported that the U.S. securities authorities have significantly expanded and reorganized the department dedicated to investigating fraud and other illegal activities in the cryptocurrency market.

According to the report, the U.S. Securities and Exchange Commission (SEC) has added 20 personnel, including investigators, litigation attorneys, and fraud analysts, to the cryptocurrency division and renamed the organization to the "Digital Assets and Cyber Unit." As a result, the total number of staff will increase to 50. This unit will investigate not only cryptocurrency issuances and cryptocurrency exchanges but also the newly emerging non-fungible tokens (NFTs).

Gary Gensler, SEC Chairman, explained the background of this reorganization, stating, "This unit has successfully resolved cases involving attempts to profit from investors in the cryptocurrency market," and "As more investors participate in the cryptocurrency market, it has become increasingly important to devote more resources to protecting these investors."

CNBC reported that this expansion of the unit came eight months after Chairman Gensler appealed to the U.S. Congress to add more staff. Since its establishment within the SEC in 2017, the cryptocurrency unit has decided on over 80 sanctions and imposed more than $2 billion (approximately 2.5 trillion KRW) in disgorgements. The SEC has mostly resolved cryptocurrency-related investigations through settlements.

The U.S. cryptocurrency market has grown about 40 times in size over the past five years, currently reaching approximately $1.7 trillion. The cryptocurrency industry maintains a highly critical stance, arguing that Chairman Gensler is focusing solely on sanctioning illegal activities rather than establishing clear regulations related to digital assets. The industry is lobbying the U.S. Congress to allow the Commodity Futures Trading Commission (CFTC) to oversee the cryptocurrency market instead of the SEC.