US Senators Elissa Slotkin (D-MI) and Jerry Moran (R-KS) have introduced a bipartisan piece of legislation that targets the rising problem of scams related to cryptocurrency.
The Strengthening Agency Frameworks for Enforcement of Cryptocurrency (SAFE Crypto) Act will work on the formation of a federal task force that will track digital asset scams, which have become highly sophisticated.
The SAFE Crypto Act proposes the establishment of a specific federal task force that will include major government agencies such as the US Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN), among others. There will also be involvement from private blockchain experts.
The prime objective of the task force is to deliver real-time intervention in cases of crypto-related fraud. Rather than waiting for the frauds to escalate, the task force will seek to disrupt illicit activity as it occurs. Through the use of regulatory capabilities and blockchain analytics technology, the team will be able to trace the flow of funds and prevent losses from escalating.
The proposed law aims at crimes related to cryptocurrencies, including investment fraud, phishing scams, operating ransomware attacks, and money laundering. Given the ever-evolving nature of the crypto industry lawmakers have insisted on the need for a comprehensive approach in dealing with the sophisticated and global nature of crypto-related scams. Such scams take advantage of the decentralized technology associated with crypto.
Senator Moran emphasized the need to protect people against financial risk posed by the growing use of cryptocurrencies. He explained that the SAFE Crypto Act is required to improve cooperation between government agencies, law enforcement and the financial services sector to improve the capacity to combat crypto scams and protect consumers.
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The SAFE Crypto Act has been formally introduced in the US Senate and will now proceed through the legislative process. The legislation must receive votes in both the Senate and the House of Representatives before it can be considered a law.
Furthermore, this bill is a targeted approach to regulation regarding the crypto market, focusing on enforcement and fraud prevention rather than regulating the market as a whole. This bill could prove to be important in protecting consumers as cryptocurrencies continue to gain popularity and become more mainstream.
The SAFE Crypto Act could be an important step in the development of the US government's approach to the rising risks of digital asset fraud.