The subcommittee on economic and consumer policy of the US House Oversight Committee asked for answers from regulators on how they will combat the crypto frauds that have plagued the industry on August 30.
The Committee, headed by Congressman Raja Krishnamoorthi of Illinois’ 8th Congressional District, wrote letters to Treasury Secretary Janet Yellen, the Chairs of the Federal Trade Commission Lina Khan, Securities and Exchange Commission Gary Gensler, and the Commodity Futures Trading Commission Rostin Behnam.
Additionally, he sent a note to major cryptocurrency exchanges like Coinbase, FTX, Binance.US, Kraken, and KuCoin, requesting an explanation of the steps being done to combat the widespread fraud and frauds in the industry.
“As stories of skyrocketing prices and overnight riches have attracted both professional and amateur investors to cryptocurrencies, scammers have cashed in,”
wrote Krishnamoorthi.
“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,” he highlighted
Congressman says “we need to regulate cryptocurrency abuse, fraud, and scams.”
Even after the Federal Trade Commission reported that over $1 billion had been lost to cryptocurrency scams this year, the Congressman alleges in his letters that the federal government has made little headway in putting an end to cryptocurrency investment schemes. The FTC’s data also showed that phony investment opportunities accounted for $575 million of all cryptocurrency fraud losses recorded to the FTC in 2021.
“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,” Krishnamoorthi wrote in his letters.
The Representative announced the action on Twitter and received feedback from upset Americans about the fraud scam. He is anticipating a response by September 12.
In reaction to Raja, one Tweet read, “Cryptocurrency is a Ponzi scam and an environmental crime.”
