On Tuesday, the 30th of August, the House Committee on Oversight and Reform made the announcement that it would be increasing its efforts to prevent fraud using cryptocurrency. As part of the action, a number of letters will be sent to a variety of cryptocurrency exchanges and authorities, asking them what measures they are doing to ensure the safety of their customers.
The committee issued a series of letters on Tuesday morning to the Department of the Treasury, the Federal Trade Commission, the Commodity Futures Trading Commission, and the Securities and Exchange Commission, as well as to five cryptocurrency exchanges (Coinbase, FTX, Binance.US, Kraken, and KuCoin), requesting information and records regarding what these agencies are doing to protect users from scams and cryptocurrency-related crime.
Chairman of the committee Krishnamoorthi, said that scammers have capitalized on the influx of money into the cryptocurrency market brought about by reports of exponential price increases and instant wealth. Cryptocurrencies are often used by con artists because of their anonymity, the immutability of their transactions, and the lack of technical awareness among many consumers and investors.
He added that:
“For all these reasons, I am concerned about the growth of fraud and consumer abuse linked to cryptocurrencies.”
Specifically, the letters request that the exchanges submit documentation going back to January 1, 2009, demonstrating efforts to prevent crypto scams and fraud, identifying, investigating, removing, or flagging possibly phony virtual currencies or accounts, and highlighting conversations about whether to implement more rigorous standards.
“Without clear definitions and guidance, agencies will continue their infighting and will be unable effectively to implement consumer and investor protections related to cryptocurrencies and the exchanges on which they are traded.”
