SEC Turns Crypto Watchdog Against Broader Web3 Crime

Hester Peirce‘s SEC Crypto Task Force is setting up a new entity, the Cyber and Emerging Technologies Unit (CETU), to fight Web3-related crimes. The CETU will replace Gary Gensler’s Crypto Assets and Cyber Unit.

Although the CETU will work closely with the Crypto Task Force, crypto-specific enforcements are far from its top priority. Its biggest concern will be fighting AIs criminal applications alongside other crimes using emerging technologies.

The SEC Will Keep Fighting Crypto Crime

Since Gary Gensler left the SEC, US federal crypto regulation has entered a new and unprecedented era. In some ways, the Commission has greatly retracted its enforcement actions against the industry, reassigning prosecution lawyers and stalling landmark cases from the previous administration.

However, the SEC still wants to fight crypto crime and is building a new unit.

“This new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce. The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow. It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies,” Acting Chair Uyeda said.

The CETU will be led by Laura DAllaird, with a team of around 30 lawyers and fraud specialists. It will replace the Crypto Assets and Cyber Unit, which was created under Gary Gensler. This new group will mainly focus on crimes using Web3 technologies.

At first, this development seems like a contradiction. In many ways, the SEC has signaled its strong willingness to reduce crypto enforcement across the board.

Peirce claimed that it wants to delegate its responsibility over certain industry sectors, limiting its outreach. However, as Peirce explained when announcing the Crypto Task Force, the SEC still prioritizes enforcement.

The CETU may work closely with the SEC‘s Crypto Task Force, but the press release reveals that its actions won’t generally concern crypto crime. For example, it will prosecute offenses related to AI, social media, hacking, and more.

In fact, the CETUs priorities list only mentions crypto once—as the fifth bullet point out of seven main interest areas.

In other words, the SEC may have a new Web3-specific crime fighter, but that still doesn‘t equate to a crypto crackdown. AI-related criminals are the CETU’s top priority, but this industry is meaningfully distinct from crypto.

The SEC may already be facing substantial budget cuts; it wouldnt have the desire or reason to reinstate Gensler-style enforcement in 2025.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.