Crypto is . . . Everywhere . . . and the SEC and other Regulators Are Sprinting to Keep Up

Crypto seems to be everywhere these days. Just last week Fidelity Investments launched a bitcoin option for its 401(k) plans. The nation’s largest plan administrator is providing the 23,000 companies it manages retirement plans for the ability to offer their employees bitcoin as an investment choice. Investors will be able to allocate up to 20% of their 401(k) accounts to bitcoin, though employers will be able to lower that cap.   

The SEC announced today (5/2/22) that it is nearly doubling the size of the unit responsible for protecting investors in crypto markets and from cyber related threats.  The newly renamed Crypto Assets and Cyber Unit, which is part of the Division of Enforcement will now have 50 staff members.

According to the SEC press release, the expanded unit will "ensure investors are protected in the crypto markets, with a focus on investigating securities law violations related to:

• Crypto asset offerings;
• Crypto asset exchanges;
• Crypto asset lending and staking products;
• Decentralized finance ("DeFi") platforms;
• Non-fungible tokens ("NFTs"); and
• Stablecoins."

These two events in the past week, coming on the heels of President Biden's March 9, 2022, executive order outlining a “whole-of-government” approach to examining a broad range of potential risks associated with the dramatic growth in digital assets, including cryptocurrencies are part of a larger continuing trend of increase awareness of crypto and the government's sprint to catch up.

We anticipate that the coming year will see the crypto market continue to grow and a dramatic increase in both regulation and governmental enforcement.