Until recently, it was “green candle galore” in the crypto markets since Trump’s election win. Bitcoin momentarily broke the all-important $100,00 level, a near 500% recovery from the 2022 Crypto Winter lows, and optimism for crypto is even reaching Congress, where talks of a U.S. National Bitcoin Reserve are gaining serious steam.

If stock market bull runs are marathons, crypto bull runs are breakneck sprints. But buyer beware: when crypto surges and FOMO takes hold, scammers seize the moment, turning hype into a goldmine for illicit activity.

With no clear regulatory framework yet in place, the risks are amplified. As former President Trump returns to office with a more pro-crypto Congress, regulatory change feels imminent. But what risks do investors face if enforcement measures are not adequately funded?

The 2024 election results could mark a pivotal chapter in crypto’s history. Can the new Trump Administration rise to the challenge to not just unlock greater innovation in crypto, but also better protect its users and investors?

Why Enforcement and Protection Should Still be a Priority

Crypto bull runs are often accompanied by a surge in scams and fraud. In 2023 alone, a period of rising prices, the FBI’s Crypto Fraud report showed that there was $5.6 billion in reported losses tied to crypto scams and fraud. A staggering 70% ($3.9 billion) of these losses stemmed from investment scams.

While phishing scams are prevalent in a digital world, the tenfold rise in Bitcoin ATM scam losses from 2020 to midway through 2024 paints the issue in a tangible way. $65 million in just the first six months of 2024 was stolen via Bitcoin ATMs, with the average loss at about $10,000 according to the Federal Trade Commission. Collectively, these figures show the financial damage and expose gaps that must be addressed to protect consumers and deter bad actors – especially if crypto is going to continue to gain traction and popularity.

The U.K. has shown how government policy can adapt to address the rise in crypto-related crime directly. In 2024, legislative updates were made to allow law enforcement to more effectively investigate, seize, and recover illicit crypto assets. Key measures include allowing asset seizures without prior arrests, confiscating investigation-related items like passwords, transferring assets to law enforcement-controlled wallets, destroying certain cryptoassets like privacy coins when necessary, and enabling victims to reclaim their funds.

The challenge is finding a balance between the measures implemented in the U.K., while also ensuring the privacy and sovereignty of crypto users.

To maintain its reputation as a global leader in financial regulation, the U.S. must establish frameworks that foster innovation while safeguarding market participants from bad actors, and refocus efforts on investigating criminal activity.

At the heart of the problem lies regulatory ambiguity, which has plagued the crypto industry for years. In 2024, despite spot Bitcoin and Ethereum ETFs gaining approval, enforcement actions against major crypto institutions intensified, something critics cite as a contradictory approach to oversight. This uncertainty stifles innovation and leaves companies struggling to navigate an inconsistent regulatory landscape.

For the incoming Trump administration, there is an obvious starting point to solving high-level compliance issues: creating a clear division of responsibilities between agencies like the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) to eliminate regulatory overlap or opaque rules. But that only partially solves the larger problem.

Protecting Investors Protects Crypto’s Growth Potential

Compliance frameworks are only as strong as those investigating and enforcing them. Effective compliance requires investment — not only from individual companies but also from enforcement agencies. If nobody is there to enforce the rules, bad actors have little to fear. Historically, regulatory agencies have lacked the specialized resources necessary to oversee the fast-evolving digital assets landscape, especially at the state level. The Trump administration now has an opportunity to prioritize investment in specialized enforcement capabilities, equipping agencies with the tools, talent, and technology to stay ahead of sophisticated bad actors.

For example, this could involve creating deeper channels for law enforcement collaboration and facilitating public-private partnerships to monitor and prevent illegal activities in the digital asset space. It could also significantly reduce the heavy-handed enforcement approach currently being applied to the crypto industry.

By allocating funds to train personnel and develop resources tailored to digital assets, agencies can better track, investigate, and prosecute illicit activities. Additionally, public and private investments in blockchain analytics tools could enable more effective tracking of transactions, deterring bad actors and aiding in asset recovery in cases of fraud.

This bolstered enforcement strategy would not only protect consumers but also enhance the legitimacy and reputation of the U.S. digital asset market on the global stage.

What will crypto look like under a pro-crypto President and Congress? To me, the future is exceptionally bright. However, the way forward will require active dialogue, strategic investments, and a commitment to collaboration between industry leaders and regulators. This moment has the potential to redefine the digital asset landscape in the U.S., setting a high standard for the world.

MoonPay, a crypto infrastructure service provider, has bought Helio, a Solana-powered crypto payment processor. According to Fox Business, the deal is reportedly worth $175 million.

The Miami-based company aims to expand its trading and marketplace volume using Helio’s products. “This acquisition is an important step in advancing our vision for the future of payments,” said Ivan Soto-Wright, CEO and co-founder of MoonPay, in a statement. “Helio’s technology and expertise strengthen our ability to deliver efficient, secure, and scalable solutions for crypto commerce, trading infrastructure, and marketplaces.”

Helio, a London-based startup, was launched in 2022 and enables businesses to process payments via digital currencies such as USDC, SOL, BTC and ETH, among others. Helio has already processed over $1.5 billion in transactions and has integrated with platforms including Discord, WooCommerce, and Shopify.

The company supports over 6,000 merchants and one million users. Meanwhile, MoonPay has over 20 million users, the statement said.

The deal comes after MoonPay formed a strategic partnership with PayPal in May to use PayPal accounts for buying and selling over 100 cryptocurrencies on its platform. Then, in October, PayPal announced that eligible U.S. users could use Venmo to fund their accounts on MoonPay.

The U.S. Securities and Exchange Commission must now thoroughly “explain itself” for refusing to grant Coinbase.’s formal request that the agency write regulations for how the industry should assess whether crypto assets are securities or not, according to a circuit-court ruling on Monday.

A three-judge panel for the U.S. Court of Appeals for the Third Circuit, in a legal rebuke of the securities regulator, partially sided with Coinbase’s effort to get the agency to offer legal clarity by writing crypto regulations.

“Rather than force the agency to make a rule, we order it to explain its decision not to,” one of the judges wrote. “Indeed, a rule may not prove necessary to solve the notice problems here; the agency could just state its position on crypto assets unequivocally.”

Judge Stephanos Bibas added a caution to the SEC: “It should not give yet another poor explanation in an already-long line of them.”

The legal blow for the agency — the second setback in a Coinbase-related case in less than a week — could leave an opening for its new leadership. Chair Gary Gensler, the architect of the SEC’s crypto enforcement-heavy approach in recent years, is stepping down as President-elect Donald Trump is sworn in on January 20. Trump’s chosen replacement, former Commissioner Paul Atkins, could have a chance to use this court demand to answer that, yes, his agency will change its course on crypto oversight.

Or, even sooner, an acting chairman such as sitting Commissioner Mark Uyeda, one of the agency’s two current Republican members, could be in a position to get that ball rolling while Atkins awaits a Senate confirmation process.

The Monday ruling called the SEC’s crypto actions “arbitrary and capricious,” echoing language from the D.C. Circuit Court of Appeals when it rejected the agency’s opposition to Grayscale’s application for a spot bitcoin (BTC) exchange-traded fund (ETF).

“Because we believe the SEC’s order was conclusory and insufficiently reasoned, and thus arbitrary and capricious, we grant Coinbase’s petition in part and remand to the SEC for a more complete explanation,” the judges ruled in this case. However, the circuit court didn’t believe Coinbase’s arguments justified a clear need to demand new rules from the regulator.

“We’re reviewing the decision and will determine next steps as appropriate,” a spokesperson for the SEC said in response to a request for comment.

“We appreciate the court’s careful consideration,” said Coinbase Chief Legal Officer Paul Grewal, in a posting on social-media site X. His company’s pursuit of this petition with the SEC is one of a number of court battles Coinbase has been waging with the agency, including its defense against an SEC enforcement action. Last week, a federal court granted the exchange’s effort to accelerate a key legal question in that case to an appeals court.

Read More: Coinbase Granted Significant Advance in Court Clash With Gensler’s SEC

While the partial ruling against the SEC was forceful, one of the judges added his more blistering view on the agency’s performance in this case.

“If the SEC were to promulgate a rule banning crypto assets, it would surely face legal challenges,” Judge Bibas noted. “One might wonder if an agency whose mission is maintaining fair, orderly, and efficient markets is authorized to ban an emerging technology. … So the SEC has sidestepped the rulemaking process by pursuing a de facto ban through enforcement instead.”