Congress Questions Coinbase, FTX, Binance, Kraken in Crypto Fraud Crackdown

A House committee has sent letters to four US federal agencies and five cryptocurrency exchanges asking about what they are doing to fight cryptocurrency fraud and scams.

Congress interrogates regulators and cryptocurrency exchanges

On Tuesday, the House Oversight and Reform Committee sent letters to four US federal agencies and five cryptocurrency exchanges in an effort to crack down on cryptocurrency-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 cryptocurrency trading platforms are Coinbase, FTX US, Binance US, Kraken, and Kucoin.

The letters call for “information on the steps they are taking to combat cryptocurrency-related fraud and scams and further actions needed to protect Americans,” explained representative Raja Krishnamoorthi (D-IL), who signed the letters.

Krishnamoorthi, who chairs the Subcommittee on Economic and Consumer Policy, commented:

As the stories of skyrocketing prices and overnight wealth have drawn both professional and amateur investors to cryptocurrencies, the scammers have cashed in.

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

“The lack of a central authority to report suspicious transactions in many situations, the irreversibility of transactions, and the limited understanding that many consumers and investors have of the underlying technology make cryptocurrency a preferred transaction method for scammers,” stressed Krishnamoorthi. .

The legislator added:

For all these reasons, I am concerned about the rise in consumer fraud and abuse related to cryptocurrencies.

“Despite federal regulations, cryptocurrency exchanges must act themselves to protect consumers who transact through their platforms. By implementing audit policies, requiring certain disclosures, removing from the list and adopting other security mechanisms, cryptocurrency exchanges can and should create safer environments for consumers, “the congressman explained.

The letters ask federal agencies and cryptocurrency exchanges to provide documents dated January 2009 to date by September 12.

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What do you think of Congress questioning federal agencies and cryptocurrency exchanges about their measures against cryptocurrency fraud and scams? Let us know in the comments section below.

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Kevin Helms

Austrian economics student Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin’s security, open source systems, network effects, and the intersection of economics and cryptography.

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