US Congress to Crack Down on USD 1 Billion Crypto Fraud and Scams
Four U.S. federal agencies and five
cryptocurrency exchanges have been sent letters by a House Committee asking for information about what they are doing to
combat cryptocurrency fraud and scams.
Congress Questions Regulators and Crypto Exchanges
The
House Committee on Oversight and Reform sent letters to four U.S. federal
agencies and five crypto exchanges on Tuesday to crack down on crypto-related
fraud and scams.
The
four agencies are the Department of the Treasury, the Federal Trade
Commission (FTC), the Commodity Futures Trading Commission (CFTC), and the
Securities and Exchange Commission (SEC). The five crypto trading platforms
are Coinbase, FTX US, Binance US, Kraken, and Kucoin.
The
letters request "information about the steps they are taking to combat
cryptocurrency-related fraud and scams and additional actions that are needed
to protect Americans," explained Rep. Raja Krishnamoorthi (D-IL), who
signed the letters.
Krishnamoorthi,
who Chairs the Subcommittee on Economic and Consumer Policy, commented:
"As
stories of skyrocketing prices and overnight riches have attracted both
professional and amateur investors to cryptocurrencies, scammers have cashed
in."
The FTC
said in June that since the start of 2021, more than 46,000 people have
reported losing over USD 1 billion in crypto to scams. "That’s about one
out of every four dollars reported lost, more than any other payment
method," the regulator noted.
"The
lack of a central authority to flag suspicious transactions in many situations,
the irreversibility of transactions, and the limited understanding many
consumers and investors have of the underlying technology make cryptocurrency a
preferred transaction method for scammers," Krishnamoorthi explained.
The
lawmaker added:
"For
all these reasons, I am concerned about the growth of fraud and consumer abuse
linked to cryptocurrencies."
"Notwithstanding
federal regulations, cryptocurrency exchanges must themselves act to protect
consumers conducting transactions through their platforms. By implementing
audit policies, requiring certain disclosures, delisting, and adopting other
safety mechanisms, cryptocurrency exchanges can—and should—create safer
environments for consumers," the congressman detailed.
The
letters ask the federal agencies and crypto exchanges to provide documents
dated from January 2009 to September 12, 2022.
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