Congress Questions major Crypto Exchanges over fraud crackdown

Congress Questions major Crypto Exchanges over fraud crackdown

 

The House Committee on Oversight and Reform sent letters to four U.S. federal bodies and five Cryptocurrency Exchanges on 30^th August in an effort to crack down on cryptocurrency-related fraud and scams.

 

The four agencies are the Department of the Treasury (DoT), the Federal Trade Commission (FTC), the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC). The five cryptocurrency trading platforms are Coinbase, FTX US, Binance US, Kraken exchange, and Kucoin.

 

The letters request “info about the steps they are taking to combat crypto-related fraud and scams and additional actions that are needed to protect American investors,” 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 Digital Currencies, scammers have cashed in.

 

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The FTC said in June that since the start of 2021, more than 46,000 people have reported losing over $1 billion in cryptocurrency to scams. “That’s about one out of every four dollars reported lost, more than any other payment mode,” the regulator noted.

 

“The lack of a central authority to flag doubtful transactions in many situations, the irreversibility of transactions, and the limited understanding many users and investors have of the underlying technology make crypto a preferred transaction method for scammers,” Krishnamoorthi emphasized.

 

The lawmaker added:

 

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For all these reasons, I am concerned about the growth of scams and user abuse linked to digital currencies.

 

“Notwithstanding federal regulations, digital currency exchanges must themselves act to protect consumers conducting transactions through their platforms. By implementing thorough audit policies, requiring certain disclosures, delisting, and adopting other safety mechanisms, Digital Currency Exchanges can—and should—create secure environments for users,” the congressman detailed.

The letters ask the federal agencies and Cryptocurrency Exchanges to provide documents dated from January 2009 to the present by September 2022.