Breaking Down the SEC's New "Cyber and Emerging Technologies Unit"

SEC Announces Cyber and Emerging Technologies Unit to Protect Retail Investors

The Securities and Exchange Commission today 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, led by Laura D’Allaird, replaces the Crypto Assets and Cyber Unit and is comprised of approximately 30 fraud specialists and attorneys across multiple SEC offices. […]

Specifically, the CETU will utilize the staff’s substantial fintech and cyber-related experience to combat misconduct as it relates to securities transactions in the following priority areas:

—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

Nikola Bankruptcy: SEC Is Company’s Largest Unsecured Creditor

Nikola Corp.’s bankruptcy included an unusual leader atop the customary list of biggest potential losers — the US Securities and Exchange Commission — and the agency’s chances of getting its claim fully paid might be dim.

The SEC ranked No. 1 on the roster of largest unsecured creditors when Nikola, a failed maker of EV trucks, sought court protection on Wednesday, with the regulator owed about $80 million, according to the company’s Chapter 11 petition.

The debt reflects what’s left of a $125 million enforcement settlement signed in December 2021. It’s unclear whether the company will have to pay the remainder when the bankruptcy is settled. For now, the SEC is lumped in with other unsecured litigants and suppliers that don’t have claims on any specific collateral, ranging from Microsoft Corp. to Smithers Tire & Automotive Testing.

SEC Crypto Cases on Hold While Task Force Eyes Broad Overhaul

The SEC’s nascent crypto agenda under President Donald Trump has prompted the agency to slam the brakes on pending litigation involving digital asset exchanges, with agency lawyers filing bids to delay or toss proceedings in at least four cases this month.

The Securities and Exchange Commission is citing a new crypto task force helmed by Commissioner Hester Peirce, a frequent dissenter in Biden-era crypto enforcement actions, as a factor that could “impact and facilitate the potential resolution” of cases involving exchanges Coinbase Global Inc., Binance Holdings Ltd., and Lejilex.

In a fourth case, the SEC on Wednesday moved to dismiss its appeal against the Crypto Freedom Alliance of Texas and the Blockchain Association over whether crypto firms should be tagged as securities “dealers.”

CFTC Fires Some Employees in Latest Government Job Terminations

The Commodity Futures Trading Commission terminated about a dozen probationary employees this week as President Donald Trump continues his bid to shrink the federal workforce. The employees, who include attorneys in the agency’s enforcement and market oversight divisions, received emails notifying them of their terminations, effective immediately, according to people familiar with the matter.