New SAFE Crypto Act Creates Federal Task Force to Fight Digital Asset Scams and Freeze Stolen Funds

This section of the Strengthening Agency Frameworks for Enforcement of Cryptocurrency Act, or the SAFE Crypto Act, establishes a dedicated federal body called the Task Force on Cryptocurrency Scams. The bill mandates that the Task Force be up and running within 180 days of the law taking effect. Its main job is to put a serious dent in the rampant digital asset scams that have cost consumers billions, particularly by coordinating efforts across different federal agencies and the private sector.

Who’s On the Hook?

Think of this Task Force as the ultimate cross-departmental meeting about stopping crypto crime. It will be chaired by the Secretary of the Treasury and includes heavy hitters like the Attorney General, the Director of FinCEN (Financial Crimes Enforcement Network), and the Secret Service. But here’s the interesting part: the bill requires the Task Force to include representatives from the private sector—specifically, stablecoin issuers and digital asset service providers—alongside consumer protection advocates and, importantly, representatives of scam victims themselves. This mixed membership is designed to combine government enforcement power with industry technical knowledge and victim perspectives, ensuring a holistic approach to the problem.

The Freeze Button: A New Power for Stablecoins

One of the most significant, and potentially controversial, mandates in this section is the requirement for 'permitted payment stablecoin issuers' to maintain the technical capability to "freeze, seize, burn, or reissue digital assets determined to be proceeds of scams." This means if you lose money to a scammer who bought stablecoins, the issuer must have the technical ability to lock down or recover those funds, provided it’s done "consistent with law and due process." For the average person, this could be a huge win, potentially offering a path to recovering stolen funds that currently doesn't exist in the wild west of crypto. However, it also gives private companies, under government direction, significant control over assets, which is a detail that will need strict legal oversight to prevent misuse.

The Transparency Question

The Task Force is tasked with a lot: evaluating data from the FBI and FTC, identifying current scam methods (like those using crypto ATMs), developing public education programs, and coordinating international efforts. They have one year to produce and publish an initial report detailing their findings and recommendations for legislative changes. However, there’s a catch: the bill explicitly states that the Federal Advisory Committee Act (FACA) does not apply to this Task Force. FACA is the law that usually ensures transparency, public access to meetings, and balanced representation for federal advisory groups. Exempting this Task Force from FACA means its discussions and decision-making process will operate with less public scrutiny than a typical federal advisory body. While this might speed up their work, it raises questions about whether the public—and especially the scam victims they represent—will have a clear view of how these powerful recommendations are being shaped.