U.S. Congress questions Coinbase, FTX, Binance, Kraken in fight against crypto-currency fraud

A House of Representatives 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.

US Congress interrogates regulators and cryptocurrency exchanges

The House Oversight and Reform Committee sent letters to four U.S. federal agencies and five cryptocurrency exchanges on Tuesday in an effort to combat 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 cryptocurrency trading platforms are Coinbase, FTX US, Binance US, Kraken, and Kucoin.

The letters ask “Learn about the steps they are taking to combat cryptocurrency fraud and scams and what additional actions are needed to protect Americans“, Explained the representative Raja Krishnamoorthi (D-IL), who signed the letters.

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

While the stories of skyrocketing prices and overnight wealth have drawn professional and amateur investors to cryptocurrencies, scammers have taken advantage of them.

The FTC said in June that since the start of 2021, more than 46,000 people have reported losing more than $ 1 billion in cryptocurrencies to scams. “This is about one in four dollars declared lost, more than any other payment method“, Observed the regulator.

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

The legislator added:

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

Despite federal regulation, cryptocurrency exchanges must act themselves to protect consumers who transact through their platforms. By implementing auditing policies, requiring certain disclosures, removing lists and adopting other security mechanisms, cryptocurrency exchanges can – and should – create safer environments for consumers.“, The congressman detailed.

The letters ask federal agencies and cryptocurrency exchanges to provide documents from January 2009 to the present by September 12.

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