Lawmakers are asking government agencies and major cryptocurrency exchanges to provide more information about what they are doing about cryptocurrency-related fraud to better protect consumers.
why it matters: The House Oversight Subcommittee on Economic and Consumer Policy has used its influence in Washington to pressure companies over information on everything from metal toxicity in infant formula to e-cigarette advertising practices. . Update Question — All documents related to crypto fraud dated January 1, 2009 (or the earliest of each company’s respective incorporation date) must be filed by September 12th.
what’s happeningRep. Raja Krishnamoorthi (D-Ill.), chairman of the subcommittee, said, “Given the growing popularity of cryptocurrencies as both a payment method and an investment, there has been a rapid increase in fraud and consumer abuse. said in a letter to government agencies and major exchanges.
- The letter was sent Tuesday by Treasury Secretary Janet Yellen, U.S. Securities and Exchange Commission Chairman Gary Gensler, Federal Trade Commission Rina Khan, Commodity Futures Trading Commission Rostin Behnham, and Coinbase Global, FTX US, Sent to the leader of major crypto exchanges on Binance. , Kraken, Kucoin.
detail: Krishnamoorthi cited the FTC’s estimate that losses from cryptocurrency fraud are expected to exceed $1 billion this year.
- “I am also concerned by the apparent lack of action by cryptocurrency exchanges to protect consumers transacting through their platforms,” he said.
- Coinbase, FTX US, Binance and Kraken did not immediately respond to requests for comment.
Featured: Congressman is a member of the Congressional Blockchain Caucus, a bipartisan group formed to bring industry and lawmakers together to study blockchain technology.
environment: The subcommittee’s fact-finding mission will be carried out in a series of forthcoming reports pursuant to President Joe Biden’s Executive Order in March, which will include, among other things, the FTC, the top consumer watchdog. and the Consumer Financial Protection Bureau on how to crack down on cryptocurrency trading.
- The CFPB issued an enforcement memorandum in May to address fraud, including misuse of the Federal Deposit Insurance Corporation logo and misrepresentation of deposit insurance coverage.
- Meanwhile, the FTC has taken aim at cryptocurrency fraud and is stepping up its publication of educational materials on cryptocurrencies.
Opposite side: Many of the largest cryptocurrency exchanges are committed to publishing educational materials across blog posts, tweets, and sites dedicated to detailing the finer points of investing in digital assets.
- FTX launched “Get to Know Crypto” this month.
- Coinbase Global rolled out voter registration tools “as part of a broader education initiative” in a blog post last week, outlining the various ways scammers can target them.
- Binance also has how-tos on identifying and avoiding cryptocurrency scams and offers personal finance tips.
Conclusion“By implementing audit policies, requiring certain disclosures, delisting and adopting other safety mechanisms, cryptocurrency exchanges can create a safer environment for consumers,” said Krishnamooti. , and should.
