This week, the Subcommittee on Economic and Consumer Policy, part of the House Oversight Committee, sent a letter addressing crypto scams and fraud to five crypto exchanges as well as several federal agencies.
The crypto exchanges include: FTX, Binance.US, Coinbase, Kraken and KuCoin – some of the largest exchanges in the US. The Subcommittee also requested information on crypto fraud from the Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Trade Commission, and the US Department of Treasury.
Representative Raja Krishnamoorthi, Chair of the Subcommittee, is aiming to gather information on what these organizations are doing to counter crypto-related fraud and scams.
The Chair issued the following statement:
“As stories of skyrocketing prices and overnight riches have attracted both professional and amateur investors to cryptocurrencies, scammers have cashed in. 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. For all these reasons, I am concerned about the growth of fraud and consumer abuse linked to cryptocurrencies.”
The Subcommittee states that crypto has become “scammers’ favored means of payment.” Given the lack of regulation in the digital asset sector, the federal government has been “slow to curb” crypto fraud, and current regulations do not “comprehensively or clearly cover digital assets.”
The Subcommittee is looking for information to “help Congress understand what they are doing to protect consumers and inform legislative solutions to bring stability to the digital asset industry.”
The letters to the crypto exchanges ask for answers to specific questions regarding policies and activities aimed at mitigating fraud. The trading platforms have until September 12, 2022, to comply.
The Subcommittee has demanded similar information from the federal agencies mentioned above with the same deadline.
All of the letters are linked below.
While multiple bills addressing crypto regulation are circling Capital Hill, none appear ready to make it to the House floor or Senate for a vote. Meanwhile, the SEC has disintegrated into regulation by enforcement as a shortcut in lieu of bright line rules.
- Click here to read the letter to the Department of Treasury.
- Click here to read the letter to the Securities and Exchange Commission.
- Click here to read the letter to the Commodity Futures Trading Commission.
- Click here to read the letter to the Federal Trade Commission.
- Click here to read the letter to Binance.US.
- Click here to read the letter to Coinbase.
- Click here to read the letter to FTX.
- Click here to read the letter to Kraken.
- Click here to read the letter to the KuCoin.