The Securities and Exchange Commission of the United States aims to fill an extra twenty posts in a special unit that investigates cryptocurrency fraud and other related crimes. This puts the total number of positions in the special Crypto Assets and Cyber Unit at 50. The SEC seeks to crack down on criminals attempting to benefit from the blossoming interest in digital assets and markets.
“As more investors get access to the cryptocurrency markets, it is critical to devote further resources to their protection,” SEC Chair Gary Gensler said in a scripted statement. “By almost tripling the size of this critical section, the SEC will be better positioned to police misconduct in the cryptocurrency markets while also addressing transparency and control problems related to cybersecurity.”
Risk of Cryptocurrencies
The increase in crypto cops comes as hackers target these online platforms and exchanges, illustrating the rising security issues around bitcoin technology.
In a particular weekend in the month of April, Beanstalk Farms, a DeFi platform, suffered a huge loss totalling $180 million collateral in a major flash-loan theft throughout a weekend in April. Flash-loan scams are one method used by criminals to benefit illegally from blockchain technologies. These loans are granted and repaid in a single blockchain transaction.
In the same month, criminals exploited a now-corrected design flaw in the Rarible marketplace, which allowed them to steal an NFT from Taiwanese artist and actor Jay Chou. That same month, cybercriminals stole NFTs believed to be worth roughly $3 million after breaking into the Instagram account of the Bored Ape Yacht Club and publishing a link to a replica website dedicated to harvesting trademark assets.
“Unlike a traditional loan, there is no collateral or even identity requirement,” Check Point security experts stated. “Hackers prefer to use flash loans since they do not have to risk their own money, and their wallets are not traceable because they are using someone else’s funds.”
In March, following the launch of the ApeCoin cryptocurrency by Bored Ape Yacht Club, thieves stole around $1.5 million by claiming a significant number of tokens using NFTs they did not actually hold and committing fraudulent flash loans.