This new unit replaces the former Crypto Assets and Cyber Unit and is comprised of 30 fraud specialists and attorneys. The CETU is purportedly designed to complement the Crypto Task Force, led by Commissioner Hester Peirce.

On February 20, 2025, the Securities and Exchange Commission (SEC) announced the creation of the Cyber and Emerging Technologies Unit (CETU) to combat cyber-related misconduct and protect retail investors from fraudulent activities. This new unit replaces the former Crypto Assets and Cyber Unit and is comprised of 30 fraud specialists and attorneys. The CETU is purportedly designed to complement the Crypto Task Force, led by Commissioner Hester Peirce. In short, the goal will be to safeguard innovation and increase confidence in the digital assets sector by undermining the activities of bad actors.  

The announcement lists several priority areas where the CETU “will utilize the staff’s substantial fintech and cyber-related experience to combat misconduct as it relates to securities transactions,” including:

• Fraud involving emerging technologies such as artificial intelligence and machine learning.
• Misuse of social media, the dark web or deceptive websites to perpetrate fraud.
• Unauthorized access to obtain material nonpublic information.
• Takeovers of retail brokerage accounts.
• Fraud related to blockchain technology and crypto assets.
• Ensuring regulated entities comply with cybersecurity rules and regulations.
• Addressing fraudulent disclosures by public issuers concerning cybersecurity.

What does this mean for the SEC enforcement agenda as it relates to the blockchain and crypto? At first glance, this press release is really a public relations message that the SEC does not intend to regulate by enforcement. That is a good thing. The markets and the defense bar have been clamoring for years that clear rules are needed. The SEC has simply announced a reorganization of one division of its enforcement staff and makes a policy statement about enforcement priorities and, in particular, fraud. 

This makes sense. However, we expect—as is the case with every new frontier in the economy—that in the wake of new legislation and regulation in crypto there will be a material rise in fraud. Bad actors are always looking to take advantage of unsuspecting victims and may now think that the coast is clear. 

But crypto entrepreneurs and those looking to increase their involvement in the U.S. crypto and blockchain space should note that the listed enforcement priorities clearly contemplate that some blockchain and crypto activities will remain within the definition of securities and will therefore be subject to SEC jurisdiction if fraud is committed. The press release does not define or even allude to what will be deemed a security, presumably leaving the definitional work on that complicated issue to Congress. 

That makes the effort currently underway in Congress to revise the Financial Innovation and Technology for the 21st Century Act (FIT21) and related NFT Act and stablecoin legislation critical. Exactly how and when digital assets are excluded from the existing definition of a security will do much to shape the regulatory landscape and will determine just how conducive the new framework is to blockchain innovation. 

Finally, remember that the Department of Justice (DOJ) maintains broad jurisdiction and authority to prosecute wire fraud crimes, which covers nearly all digital asset transactions. At this point, we do not see any DOJ policy changes from Attorney General Pam Bondi’s office suggesting that criminal prosecutions will not be brought. 

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