SEC Forms Cyber Unit to Fight Crypto Fraud and Digital Scams

• The SEC launches a new cyber unit to tackle fraud in crypto and digital assets.  
• The unit will focus on stopping scams in blockchain finance and cybersecurity risks.  
•  Its goal is to protect investors and ensure crypto grows under clear regulations.

As announced in its press release, the U.S. Securities and Exchange Commission has formed a newly appointed team to address cyber threats, crypto fraud, and fintech-related misconduct. The Cyber and Technologies Unit will replace the Crypto Assets and Cyber Team, expanding its focus to include artificial intelligence, blockchain scams, and cybersecurity threats. The unit, led by Laura D’Allaird, will deploy fraud specialists and attorneys to safeguard investors and uphold market integrity.  

A Broader Scope: Beyond Crypto Regulation

The SEC’s new subsidiary will take a serious approach to criminals targeting fraud across digital assets, AI-driven schemes, and cybersecurity vulnerabilities. The newly formed team’s primary objectives include protecting investors from illicit crypto dealings, AI-based scams, and deceptive fintech practices.

Besides fraud, the agency will tackle cyber threats like retail brokerage account theft, hacking for insider trading, and scams using social media or the dark web. These crimes have risen with the expansion of digital finance, raising concerns over security risks in financial markets.

Additionally, CETU will ensure that public companies and regulated financial institutions adhere to cybersecurity regulations. The unit will monitor cybersecurity disclosures, preventing misleading statements that could endanger investors.

The Role of Leadership and Policy Adjustments

Laura D’Allaird is an SEC attorney with years of enforcement experience and will head the division. Her leadership aims to balance regulatory enforcement with technological advancements. The shift from the SEC’s previous Crypto Assets and Cyber Unit to CETU signals an evolving approach to financial oversight.

Acting SEC Chairman Mark T. Uyeda emphasized CETU’s role in complementing the Crypto Task Force, led by Commissioner Hester Peirce. Uyeda highlighted that the unit would not only protect investors but also foster market efficiency by ensuring innovation thrives within a structured regulatory framework.

CETU’s creation reflects a shift toward a much more collaborative model. Rather than only directing attention to enforcement actions, the commission aims to provide clearer guidelines for compliance, creating an environment that promotes both investor protection and financial innovation.  

Related: CFTC, SEC Discuss Joint Efforts to Regulate the Crypto Market

Development of New Threats in Digital Finance

The rise of financial cybercrime shows clearly the need for a body like CETU. Chainalysis reported that in 2024 alone, unauthorized addresses received $40.9 billion in crypto assets. Though this figure is down from $54.3 billion in 2022, it remains higher than the $11 billion recorded in 2020.
AI-driven fraud schemes have also become a looked-upon concern for a very long time. A report by ACA Global warns that cybercriminals continue to use AI to impersonate financial executives, gaining unauthorized access to sensitive client information. As fraud tactics evolve, CETU will focus on identifying and dismantling these deceptive strategies.

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