SEC Plans to Hire More Staff in Crypto Enforcement Unit to Fight Frauds

May 4, 2022

The U.S. Securities and Exchange Commission (SEC) on Tuesday
announced that it will expand and rebrand its Cyber Unit to fight
against cyber-related threats and protect investors in
cryptocurrency markets.

To that end, the SEC is renaming the Cyber Unit within the
Division of Enforcement ^[1]
to Crypto Assets and Cyber Unit and plans to infuse 20 additional
positions with the goal of investigating wrongdoing in the crypto
markets.

The goal, per the agency, is to tackle cryptocurrency fraud and
crackdown on malicious actors ^[2]
attempting to profit from crypto marketplaces.

The Cyber Unit was instituted ^[3]
in September 2017 with a focus on addressing cyber-based threats
and protecting retail investors. But given the dramatic evolution
of the digital assets markets in recent years, the new unit is
expected to focus on securities law violations pertaining to –

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

Additionally, the unit also aims to take action against SEC
registrants and public companies for lapses in cybersecurity
controls and for failing to appropriately disclose data breaches
and other security incidents.

The cyber team is said to have brought more than 80 enforcement
actions related to fraudulent and unregistered crypto asset
offerings and platforms since 2017, resulting in $2 billion in
monetary relief for investors, according to SEC.

“Crypto markets have exploded in recent years, with retail
investors bearing the brunt of abuses in this space. Meanwhile,
cyber-related threats continue to pose existential risks to our
financial markets and participants,” said ^[4]
Gurbir S. Grewal, Director of the SEC’s Division of
Enforcement.

“The bolstered Crypto Assets and Cyber Unit will be at the
forefront of protecting investors and ensuring fair and orderly
markets in the face of these critical challenges.”

References

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Division
of Enforcement (www.sec.gov)
^{^}
malicious actors
(thehackernews.com)
^{^}
instituted
(www.sec.gov)
^{^}
said
(www.sec.gov)

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OWASP TOP !0

Injection. Injection flaws, such as SQL, NoSQL, OS, and LDAP injection, occur when untrusted data is sent to an interpreter as part of a command or query. The attacker’s hostile data can trick the interpreter into executing unintended commands or accessing data without proper authorization. Broken Authentication. Application functions related to authentication and session management are often implemented incorrectly, allowing attackers to compromise passwords, keys, or session tokens, or to exploit other implementation flaws to assume other users’ identities temporarily or permanently. Sensitive Data Exposure. Many web applications and APIs do not properly protect sensitive data, such as financial, healthcare, and PII. Attackers may steal or modify such weakly protected data to conduct credit card fraud, identity theft, or other crimes. Sensitive data may be compromised without extra protection, such as encryption at rest or in transit, and requires special precautions when exchanged with the browser. XML External Entities (XXE). Many older or poorly configured XML processors evaluate external entity references within XML documents. External entities can be used to disclose internal files using the file URI handler, internal file shares, internal port scanning, remote code execution, and denial of service attacks. Broken Access Control. Restrictions on what authenticated users are allowed to do are often not properly enforced. Attackers can exploit these flaws to access unauthorized functionality and/or data, such as access other users’ accounts, view sensitive files, modify other users’ data, change access rights, etc. Security Misconfiguration. Security misconfiguration is the most commonly seen issue. This is commonly a result of insecure default configurations, incomplete or ad hoc configurations, open cloud storage, misconfigured HTTP headers, and verbose error messages containing sensitive information. Not only must all operating systems, frameworks, libraries, and applications be securely configured, but they must be patched/upgraded in a timely fashion. Cross-Site Scripting XSS. XSS flaws occur whenever an application includes untrusted data in a new web page without proper validation or escaping, or updates an existing web page with user-supplied data using a browser API that can create HTML or JavaScript. XSS allows attackers to execute scripts in the victim’s browser which can hijack user sessions, deface web sites, or redirect the user to malicious sites. Insecure Deserialization. Insecure deserialization often leads to remote code execution. Even if deserialization flaws do not result in remote code execution, they can be used to perform attacks, including replay attacks, injection attacks, and privilege escalation attacks. Using Components with Known Vulnerabilities. Components, such as libraries, frameworks, and other software modules, run with the same privileges as the application. If a vulnerable component is exploited, such an attack can facilitate serious data loss or server takeover. Applications and APIs using components with known vulnerabilities may undermine application defenses and enable various attacks and impacts. Insufficient Logging & Monitoring. Insufficient logging and monitoring, coupled with missing or ineffective integration with incident response, allows attackers to further attack systems, maintain persistence, pivot to more systems, and tamper, extract, or destroy data. Most breach studies show time to detect a breach is over 200 days, typically detected by external parties rather than internal processes or monitoring.

SEC Plans to Hire More Staff in Crypto Enforcement Unit to Fight Frauds

References

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