Americans lost nearly $21 billion to fraud last year, with cryptocurrency-related scams accounting for the largest share of losses—more than $11 billion, according to the FBI. In Oklahoma alone, over $37 million was stolen through digital asset schemes, underscoring a growing threat that law enforcement says is outpacing current regulations.
“Criminals are exploiting a system that hasn’t kept pace with how money now moves,” said Sheriff Chris West of Canadian County, Oklahoma, who also serves as president of the National Sheriffs’ Association. Investment scams tied to digital assets now dominate fraud losses, as criminals move faster, scale rapidly, and target the least regulated pathways.
Sheriffs across the country are on the front lines—taking victim reports, working with federal partners, and trying to trace money that can cross platforms and borders in minutes. In one recent case, a family in Yukon, Oklahoma, lost nearly $100,000 over a year. They believed they were investing, but when they tried to withdraw funds, their account balance was zero.
Victims are often directed to convert cash into cryptocurrency at kiosks or online platforms and send it to accounts controlled by criminals overseas. Within minutes, the funds vanish. By the time a report is filed, the trail is cold. This regulatory gap, West argues, is the core problem.
Traditional banks operate under clear Bank Secrecy Act and anti-money laundering rules. They monitor transactions, flag suspicious activity, and report it—giving law enforcement the visibility to trace funds and disrupt networks. But not every entity moving money is held to the same standard. Digital asset platforms, exchanges, and cryptocurrency ATMs function under a patchwork of requirements that vary by jurisdiction or fall short of what applies to banks.
“Criminals understand that difference. They use it,” West said. “Right now, they are choosing the fastest and least regulated path to move money—and too often, that path is digital assets.”
States are beginning to respond. Oklahoma lawmakers recently passed one of the nation’s first laws targeting fraud tied to cryptocurrency ATMs. But as West noted, a borderless threat cannot be addressed one state at a time. The scale is national: one in five Americans has experienced financial loss through an online scam.
As one blockchain investigator put it, “Organized crime has learned to weaponize trust. They don’t break into your wallet—they walk through your emotions, your phone, and your social media.”
West and the National Sheriffs’ Association are calling on Congress to close the gap by applying the same anti-money laundering and Bank Secrecy Act standards to digital asset platforms that already govern banks. “No carveouts. No delay,” West said. “The same expectations for identifying customers, monitoring transactions, and reporting suspicious activity should apply to every entity moving money.”
This push comes amid broader debates over fraud and regulatory oversight. Recent clashes between Minnesota officials over credit for fraud raids highlight the political stakes, while reforms to curb hospice Medicare fraud show the bipartisan appetite for stronger enforcement. But the crypto gap remains a glaring vulnerability.
Sheriffs are already doing the work—tracking cases, supporting victims, and coordinating across jurisdictions. “It’s time for the law to catch up,” West concluded. “Congress can change that. Close the gap, or criminals will keep exploiting it.”
