The U.S. Securities and Exchange Commission (SEC) announced the creation of a new cyber task force designed to target cyber-related misconduct and protect retail investors from cyber threats. Among other things, the unit will target initial coin offerings (ICOs) and other blockchain-based projects that run afoul of SEC regulations.
The task force will “focus on the Enforcement Division’s substantial cyber-related expertise on targeting cyber-related misconduct”. This unit will target threats to the securities market such as market manipulation, hacking, dark web misconduct, intrusions into retail brokerage accounts, and threats to exchanges and other market infrastructure. Another important aspect is that the task force will also investigate “violations involving distributed ledger technology and initial coin offerings”.
The fact that SEC will scrutinize ICOs more closely should not be surprising. Earlier this month, SEC executives revealed that they perceive threats to retail investors within the ICO marketplace, noting that “with any kind of newsworthy event, roaches kind of crawl out of the woodwork and try to scam money off of investors”.
Steven Peikin, Co-Director of the SEC’s Enforcement Division, added: “Protecting the welfare of the Main Street investor has long been a priority for the Commission. By dedicating additional resources and expertise to developing strategies to address misconduct that victimizes retail investors, the division will better protect our most vulnerable market participants.”