Crypto crime is on the rise. Yet, at a time when criminal activity in the cryptocurrency industry is surging, the Trump administration has decided to scale back its cryptocurrency enforcement efforts. This move is concerning, especially considering the alarming spike in crypto-related crime that continues to threaten millions of Americans.
In this blog, we’ll dive into why the scaling back of crypto crime enforcement is not just a bad idea, but a dangerous one. We’ll discuss why crypto crime is becoming more prevalent, how it affects everyday citizens, and why strong regulatory action is urgently needed.
Rising Crypto Crime: What’s Really Happening?
Crypto crime has reached record levels in recent years, and the statistics are staggering. In 2024, illicit cryptocurrency addresses received an estimated $40 billion to $75 billion in funds. This is not a small issue—it’s a growing epidemic. From ransomware attacks to scams and fraud, criminals are increasingly turning to cryptocurrency as their weapon of choice.
Take, for example, the $1.5 billion hack of the Bybit exchange last month, which marked the largest theft in crypto history. This hack shows that the security of crypto platforms is still very much at risk. Yet, instead of ramping up enforcement, the Trump administration seems to be loosening the reins, leaving the industry to deal with these escalating crimes without sufficient oversight.
The Role of Crypto in Ransomware Attacks
Ransomware has become one of the most significant and visible ways in which crypto is used for illicit purposes. These attacks, where criminals lock up data and demand payment in cryptocurrency to restore access, have exploded in recent years. Cryptocurrency’s anonymity and ability to transfer large sums of money across borders quickly make it the perfect vehicle for cybercriminals.
In February 2024, UnitedHealth Group, one of the largest insurers in the U.S., was attacked by ransomware. The hackers demanded and received $22 million in bitcoin, impacting hospitals, pharmacies, doctors’ offices, and millions of Americans. This was just one of many examples.
Ransomware attacks aren’t just a nuisance—they’re a real threat to the infrastructure that Americans rely on every day. Crypto-enabled crime like this affects us all. So, why is the government pulling back on efforts to regulate this?
Meme Coin Rug Pulls: A Growing Scam Epidemic
Another type of crypto fraud that has surged in recent months is the meme coin rug pull. Meme coins are cryptocurrencies inspired by internet trends, celebrities, or memes. These volatile assets are ripe for exploitation, and fraudsters have found new ways to manipulate the market.
In a rug pull, a small group of individuals purchase a large portion of a meme coin’s supply, artificially inflating the price. Then, once the price reaches a peak, they sell off their holdings, causing the coin’s value to plummet. Ordinary investors are left holding worthless tokens.
One recent example involved Haliey Welch, who launched a meme coin after gaining popularity on TikTok. The coin’s value skyrocketed initially, only to crash by over 90% after the insiders sold off their shares. Many investors were left devastated, with one even commenting, “I am a huge fan of Hawk Tuah, but you took my life savings.”
These kinds of scams are highly damaging, especially to inexperienced crypto investors who fall for the hype without fully understanding the risks.
Pig Butchering and Romance Baiting: Crypto Scams Targeting Individuals
While rug pulls affect a large number of people at once, some crypto crimes are more personal. Pig butchering, or romance baiting, is a particularly devastating scam. In these cases, cybercriminals use fake online romances to lure victims into investing in cryptocurrency, only to steal their money once they have gained their trust.
Take the heartbreaking case of Shai Plonski, a California resident who fell victim to a romance scam on Facebook. He was duped into thinking he had found the “perfect woman,” who convinced him to invest his life savings in cryptocurrency. When he grew concerned and tried to withdraw his funds, he discovered it was all a scam. Unfortunately, he was one of over 40,000 victims in the U.S. who have lost money to these types of scams.
The tragic reality is that many people lose their entire life savings to crypto fraud. And yet, instead of taking stronger measures to combat these crimes, the SEC has decided to dial back its efforts, leaving many victims without recourse.
Bitcoin ATMs: Scams Targeting Seniors
One of the newest scams in the crypto space involves bitcoin ATMs. In this scam, criminals persuade victims to deposit cash into an ATM using a QR code. The ATM then converts the cash into bitcoin, which is immediately sent to the scammer’s digital wallet. This is particularly concerning because seniors are often targeted by these scams, losing significant amounts of money.
For instance, Beaufort County, South Carolina, with a large senior population, reported a staggering $3.1 million in crypto scams last year, including several involving bitcoin ATMs. One elderly woman was tricked into depositing $7,500 into an ATM after receiving a fraudulent call from a scammer posing as the sheriff’s office. She never saw the money again.
Crypto Crime Is a Threat to National Security
Beyond financial losses, crypto is increasingly being used to fund terrorism and other illicit activities. The anonymity of cryptocurrencies makes it an ideal tool for terrorists to fund their operations without detection. This is a critical issue that affects not just individuals, but national security.
The scaling back of crypto enforcement by the SEC and other government agencies is irresponsible, especially when crime within the cryptocurrency space is at an all-time high.
Why We Need Stronger Crypto Crime Enforcement
The need for stronger crypto crime enforcement has never been more urgent. Criminals are using cryptocurrencies to carry out ransomware attacks, scam investors, target seniors, and even fund terrorism. The SEC’s decision to scale back its crypto enforcement unit is a major mistake, and it’s the wrong response at exactly the wrong time.
Instead of easing up on crypto regulation, we should be doubling down on enforcement to ensure that crypto doesn’t become a haven for fraudsters. The government must take immediate action to protect citizens from these rising threats.
Conclusion: A Call for Stronger Action
As we’ve seen, crypto crime isn’t just an isolated issue—it’s a pervasive problem affecting people across the United States and around the world. From ransomware attacks to meme coin fraud, the risks associated with cryptocurrency are real and escalating. Instead of loosening enforcement, the government should be stepping up its efforts to curb crypto crime and protect innocent people from becoming victims.
Let’s not wait until more people lose their life savings or become targets of ransomware attacks. It’s time to hold crypto criminals accountable and protect the American public.
Relevant Links for Further Reading
- Cryptocurrency Scams: How to Protect Yourself
- Ransomware Attacks and Cryptocurrency
- SEC’s Role in Crypto Regulation
Photo credit: The National Law Review
