The recently announced Cyber Unit by the U.S. Securities and Exchange Commission (SEC) will focus on blockchain technology.

Speaking at the Securities Enforcement Forum 2017, Stephanie Avakian, Co-Director, Division of Enforcement, detailed the SEC Enforcement Division’s initiatives on retail investor protection and cybersecurity.

“We do think there is more we can do to align our resources with two of our key priorities – specifically, retail and cyber…we think that some structural change and strategic focus will enable us to better fulfill our investor protection mission. And so the Commission recently announced the creation of a Retail Strategy Task Force and a Cyber Unit,” Avakian said.

She said that the need for Cyber Unit was driven by the recent surge in cyber-related misconduct. Avakian said that these cybercrime-related activities are further facilitated by easy access to the dark web marketplace and digital currency, both of which make it difficult to track the flow of funds involved in cyber violations.

“The risk that the cyber threat poses is so serious that we think it is critical that we have a group of people specifically focused on dealing with it,” she said, adding “this space warrants a consistent, well-informed, and oftentimes, measured, approach; having a dedicated unit consider and address these issues will help us achieve this goal.”

Avakian said that for some of these reasons, the Cyber Unit will also focus on blockchain technology, and said:

“The emerging issues presented by blockchain technology warrant a consistent, thoughtful approach – and the best way to do that is to centralize the expertise and the focus in a single unit.”

Referring to the investigative report published by the SEC earlier this year on how tokens issued in initial coin offerings (ICOs) could fall under the scope of securities laws, she emphasized on the potential of blockchain technology to facilitate fraud.

“Blockchain technology presents many interesting issues and can of course present legitimate opportunities for raising capital. But, like many legitimate ways of raising capital, the popular appeal of virtual currency and blockchain technology can be an attractive vehicle for fraudulent conduct,” Avakian said. “We think that creating a permanent structure for the consideration of these issues within the Cyber Unit will ensure continued focus on protecting both investors and market integrity in this space.”