HomeWhistleblowers Take Note: SEC Nearly Doubles Cryptocurrency Enforcement Staff

Whistleblowers Take Note: SEC Nearly Doubles Cryptocurrency Enforcement Staff

Geoff Schweller

On May 3, the U.S. Securities Exchange Commission (SEC) announced that the newly renamed Crypto Assets and Cyber Unit will grow to fifty positions, nearly doubling in size. The agency’s allocation of resources to the unit, which is responsible for protecting investors in crypto markets and from cyber-related threats, reflects the SEC’s increased focus on the enforcement of cryptocurrency fraud.

“The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,” said SEC Chair Gary Gensler. “The Division of Enforcement’s Crypto Assets and Cyber Unit has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets. By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity.”

As in all areas of the SEC’s enforcement efforts, whistleblowers will play a key role in the success of the Crypto Assets and Cyber Unit. Individuals who report cryptocurrency fraud to the SEC can qualify for monetary award and anti-retaliation protections. Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the SEC with original information that leads to a successful enforcement action, are entitled to awards of 10-30% of the funds collected by the government. Overall, the SEC has awarded approximately $1.2 billion to 268 whistleblowers since issuing its first award in 2012.

According to the SEC, since the Crypto Assets and Cyber Unit (formerly known as the Cyber Unit) was created in 2017, it “has brought more than 80 enforcement actions related to fraudulent and unregistered crypto asset offerings and platforms, resulting in monetary relief totaling more than $2 billion.”

The unit will focus on securities law violations related to crypto asset offerings, crypto asset exchanges, crypto asset lending and staking products, decentralized finance platforms,
non-fungible tokens, and stablecoins.

“Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space. Meanwhile, cyber-related threats continue to pose existential risks to our financial markets and participants,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “The bolstered Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges.”

Individuals considering blowing the whistle to the SEC should first consult an experienced SEC whistleblower attorney to ensure they are fully protected and qualify for the largest possible award.

Latest News & Insights

  • May 20, 2022

    On May 25, leading whistleblower groups from both sides of the Atlantic are coming together for a free public event highlighting whistleblower developments in both the United States and the United Kingdom. The event, which is both ...

  • May 19, 2022

    On May 19, the U.S. Securities and Exchange Commission (SEC) issued a whistleblower award to an individual who voluntarily provided the agency with original information that led to a successful enforcement action. Through the SEC ...

  • May 17, 2022

    On May 16, leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto gave a keynote address at a U.S. Department of State International Visitor Leadership Program (IVLP) event. The event was part of a program en ...

  • May 12, 2022

    On May 12, the U.S. Internal Revenue Service (IRS) announced that John W. Hinman will serve as the Director of the IRS Whistleblower Office. Hinman will oversee the agency’s highly successful whistleblower award program. Since 200 ...

Subscribe for News & Resources

Our content is crafted and curated by the partners and associates at KKC.