On February 20, 2025, the SEC announced the creation of the Cyber and Emerging Technologies Unit (CETU) “to focus on combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space.” The CETU’s focus on protecting retail investors harkens back to similar SEC initiatives under former SEC Chairman Jay Clayton.
Acting Chairman Mark Uyeda commented that “this new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce . . . [and] will also allow the SEC to deploy enforcement resources judiciously.” He also stated, “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.”
This new unit will include approximately 30 fraud specialists and attorneys across multiple SEC offices, and will replace the Division of Enforcement’s existing Crypto Assets and Cyber Unit., which had about 50 dedicated personnel.
The CETU will be led by Laura D’Allaird and will focus on these priorities:
- 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
Public companies should be aware that cybersecurity disclosure (including about material cybersecurity incidents) remains an enforcement risk which will continue to demand close attention.
In addition, on January 21, 2025, the SEC announced the creation of the Crypto Task Force “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.” The Crypto Task Force involves multiple SEC divisions and offices and focuses on “help[ing] the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”
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