As cryptocurrency gains wider use, two US senators have introduced legislation to create a federal task force aimed at fighting digital asset fraud, signalling a more coordinated approach to protecting investors and the financial system.
The Strengthening Agency Frameworks for Enforcement of Cryptocurrency (SAFE) Act, brought forward by Democrat Elissa Slotkin and Republican Jerry Moran, seeks to unite government agencies and private sector experts to identify, prevent, and respond to crypto scams.
The SAFE Crypto Act proposes a working group that will analyse trends in cryptocurrency fraud and develop strategies to prevent crimes in real time.
Local law enforcement agencies would gain enhanced investigative tools, while public education campaigns would raise awareness about common scams.
Slotkin said,
“This task force, established by the SAFE Cryptocurrency Act, will allow us to draw upon every resource we have to combat fraud in digital assets.”
Moran added,
“As cryptocurrency becomes more widely used, this legislation would help counter threats and make certain all Americans are better protected from crypto scams.”
The urgency of this legislation is underscored by FBI data showing Americans lost $9.3 billion to crypto-related investment scams in 2024, a 66% increase from 2023, with individuals over 60 losing $2.84 billion.
Many of these scams reference cryptocurrency without necessarily involving actual blockchain transactions, highlighting the evolving sophistication of fraudsters.
Gabriel Shapiro, general counsel at Delphi Labs, commented that the SAFE Crypto Act could put fraudsters on edge.
“Scammers will probably end up shitting themselves if this goes hard,” he said, noting that high-ranking officials including the attorney general, the director of the Financial Crimes Enforcement Network, and the director of the United States Secret Service would lead efforts to pursue crypto criminals.
Shapiro added that the Act could be particularly effective as US securities and commodity regulators are currently less focused on enforcement against hackers, scammers, and Ponzi schemes.
Blockchain intelligence firm TRM Labs is among private partners prepared to assist, with Ari Redbord, vice president and global head of policy, noting that collaboration between industry and law enforcement could “meaningfully reduce criminals’ ability to exploit transformative technologies for harm.”
While the legislation focuses on reducing fraud, its ripple effects may reach the wider crypto banking and business landscape.
Heightened regulatory scrutiny could lead to bank de-risking, where institutions become reluctant to work with crypto firms.
Smaller companies and startups may find access to banking services more limited, potentially driving some to operate in less regulated regions.
Market concentration is another concern.
Firms with deep pockets may better absorb compliance costs, leaving smaller players struggling to meet new reporting, licensing, and transparency requirements.
This could reduce competition and innovation, though larger companies might benefit from regulatory clarity.
For SMEs, the SAFE Crypto Act could significantly increase operational costs.
Reporting obligations, licensing demands, and transparency requirements could strain smaller businesses with limited resources.
Compliance costs may reduce budgets for growth and innovation, potentially slowing the pace of new technology and service development.
Despite these challenges, the Act may also provide clearer guidance for areas like stablecoins, custody solutions, and compliant crypto services.
Regulatory clarity could make certain offerings, such as crypto payroll solutions, more attractive to financial partners and enterprise clients.
Startups operating within this framework might find new opportunities to innovate safely, balancing security with growth potential.
The SAFE Crypto Act represents a significant effort to protect investors and curb fraud, but it also introduces a complex regulatory landscape for crypto businesses.
While larger firms may adapt more easily, smaller players will face difficult choices between compliance costs and innovation.
The legislation’s ultimate impact will hinge on how effectively the public-private task force can prevent fraud while allowing the industry to continue evolving.
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