The new unit aims to protect retail investors and foster innovation by addressing cyber-related misconduct and emerging technology fraud.

By Margaret Graham, Michael H. Rubin, Nathan H. Seltzer, and Douglas K. Yatter

On February 20, 2025, the Securities and Exchange Commission (SEC) announced the establishment of the Cyber and Emerging Technologies Unit (CETU), which will focus on combatting cyber-related misconduct and protecting retail investors from fraud in the emerging technologies sector. The new unit, led by Laura D’Allaird, replaces the SEC’s Crypto Assets and Cyber Unit and comprises about 30 fraud specialists and attorneys from various SEC offices with “substantial fintech and cyber-related experience.” This is a decrease from the approximately 50 individuals who worked in the Crypto Assets and Cyber Unit.

In the statement announcing the CETU’s establishment, SEC Acting Chairman Mark T. Uyeda noted that the CETU will “complement the work of the Crypto Task Force,” which was created in January 2025 to develop a comprehensive and clear regulatory framework for cryptoassets.

The CETU will focus on several priority areas, including fraud involving artificial intelligence and machine learning, as well as fraud involving blockchain technology and cryptoassets.

Acting Chairman Uyeda noted that the CETU intends to not only deploy enforcement resources judiciously to protect investors, but also “facilitate capital formation and market efficiency by clearing the way for innovation to grow,” including by rooting out bad actors who seek to misuse technological innovations and thereby “diminish confidence in new technologies.” In recent public remarks, Acting Chairman Uyeda again explored this theme, noting that capital formation, “a core SEC mission,” cannot flourish “in an environment rife with fraud and deceit.” This emphasis on not only protecting investors but also facilitating capital formation and innovation represents a messaging shift from the SEC’s prior statements in this area, which focused on investor protection alone.

Latham & Watkins is closely monitoring SEC developments under the Trump administration and will continue to provide updates and guidance.