US Congress questions 5 crypto exchanges over $1 billion fraud
The US Congress sends inquiries to five major stock exchanges regarding $1 billion in crypto fraud losses since 2021. The House Committee on Oversight and Reform is stepping up its efforts to pressure federal agencies and crypto exchanges to protect Americans from scammers and scams.
The committee, chaired by Illinois 8th District Congressman Raja Krishnamoorthi, sent letters to four agencies, including SEC Chair Gary Gensler, Treasury Secretary Janet Yellen, Commodity Futures Trading Commission Chair Rostin Behnam and Federal Trade Commission Chair Lina Khan.
The letters were also sent to five major crypto exchanges, namely Coinbase, FTX, Binance.US, Kraken and KuCoin. The letter demands documents and information about the steps these exchanges are taking to protect consumers from fraud.
According to FTC research, over $1 billion in crypto has been exploited in fraud since 2021. The latest The chain analysis report shows an increase in crypto hacks and falling into crypto scams. The reports also mentioned that the hacks are largely focused on funds from DeFi protocols.
Rep. Raja Krishanamoorthi, D.-Ill., chairman of the Subcommittee on Economic and Consumer Policy, said that as stories of rising prices and overnight riches attracted both amateur and professional investors to the crypto space, scammers have cashed in.
Krishnamoorthi believes that the lack of a central authority to flag suspicious transactions and the irreversibility of transactions made it a preferred transaction method for fraudsters. Moreover, the limited understanding many investors and consumers have of the underlying technology makes it more vulnerable to fraudsters.
The letter asks the crypto exchanges and federal agencies to respond by September 12 with information related to what they are doing to prevent fraud. The committee says these responses will be used to create legislative solutions.
The letters also require the exchanges to produce documents dating back to January 1, 2009, showing efforts to combat crypto fraud and scams.
These documents are required from exchanges to demonstrate relevant efforts to identify, investigate and remove potentially fraudulent digital assets or accounts. The letters highlighted the discussions around whether stricter guidelines should be adopted.
Also read: 7 common crypto scams on Twitter
