- SEC forms Cross-Border Task Force to tackle transnational fraud in crypto and securities markets.
- Initial focus includes China, with oversight of auditors, underwriters, and foreign firms.
- Rising pump-and-dump cases, including CR7, Kanye West, and LIBRA tokens, drive new enforcement.
The U.S. Securities and Exchange Commission has created a Cross-Border Task Force to confront transnational financial fraud. The initiative responds to the increasing role of international actors in market manipulation, particularly in crypto pump-and-dump schemes. By consolidating enforcement resources, the SEC intends to strengthen oversight in cases where overseas jurisdictions complicate investor protection.
Task Force Structure and Leadership
SEC Chairman Paul S. Atkins announced the new body through an X post earlier this week. He stated that the regulator would not allow foreign companies, intermediaries, or traders to exploit international borders to avoid U.S. securities laws. He added that access to U.S. capital markets remains open but only for compliant actors. The Cross-Border Task Force will coordinate with the Division of Enforcement to investigate foreign-based firms.
The first areas of focus include jurisdictions such as China, where U.S. investor safeguards face additional challenges. Margaret A. Ryan, Director of the Division of Enforcement, confirmed that her division would support the initiative. She explained that the new body would employ investigative expertise to pursue market manipulation across international boundaries. According to Ryan, the program is designed to protect American investors by closing gaps exploited in cross-border financial schemes.
The task force will also review the role of auditors, underwriters, and market gatekeepers who facilitate entry into U.S. exchanges. SEC officials stated that these actors play a crucial part in granting legitimacy to foreign companies seeking capital. Therefore, their practices will fall under closer scrutiny to ensure compliance with securities laws. The initiative builds on the SEC’s broader crypto oversight strategy. Regulators noted that investor safety in digital assets requires stronger measures due to frequent manipulation in smaller markets.
Rising Crypto Pump-and-Dump Cases
The timing of the task force corresponds with a rise in pump-and-dump activity across cryptocurrency markets. These schemes typically involve thinly traded tokens that surge through concentrated promotion. Following the price spike, insiders rapidly sell, leaving late entrants with steep losses.
One recent case involved a CR7-branded token on Solana, which briefly reached a $5 million market cap. Within days, it collapsed to zero, mirroring a prior incident where a fake version drained $143 million. Another example occurred when Kanye West’s token launched in August and quickly lost nearly all its value.
The LIBRA project also collapsed under accusations of insider trading and massive liquidity withdrawals. Reports stated that $87 million was removed from liquidity pools while a trader cashed out $107 million. That sequence erased nearly 94% of the token’s value. With the establishment of the Cross-Border Task Force, the SEC aims to address global manipulation directly. The agency will investigate transnational actors, scrutinize market gatekeepers, and target pump-and-dump practices that continue to harm investors.
