Committee of the U.S Questioned FTX and Coinbase on Fraud Prevention  –

• U.S Subcommittee wrote a letter to crypto exchanges seeking information regarding fraud in the crypto industry

• Five crypto industry giants, Coinbase, FTX, Kraken, KuCoin, and Binance, received a four-page letter seeking “All documents linked to crypto frauds since 2009.”

Consumer watchdogs of the U.S House of Representatives think that crypto industry fraud is becoming a massive issue in the current Era. 

On August 30, Raja Krishnamoorthi, chairperson of the Subcommittee Economic and Consumer policy of the House Committee on oversight and reform, wrote a letter to one of the largest and most popular crypto exchanges in the U.S requesting “information and documents” Showing how several companies are working to “combat cryptocurrency-related fraud.

The committee is an active member of the U.S House, which collectively forms Congress along with the U.S Senate, and is likely preparing to introduce and debate bills and other legislative measures, including laws regulating cryptocurrency. 

Although five crypto industry giants, Coinbase, FTX, Kraken, KuCoin, and Binance, received a four-page letter seeking “All documents linked to crypto frauds since 2009 and have to answer five questions mentioned in the letter latest by September 1.   

The letters are virtually similar, each claiming that “cryptocurrencies have become scammers’ favoured means of payments as well as their preferred bait for unsuspecting victims.”

Raja Krishnamoorthi highlighted, “Given the growing popularity of cryptocurrencies both as a form of payment and investment, I am concerned by the rapid growth of fraud and consumer abuse.”   

Underlining  FTC(Federal Trade Commission), figure Krishnamoorthi evaluates crypto fraud will con victims out of $1 billion in the financial year 2022.   

Krishnamoorthi, jotted down in his letter that “He is also concerned by the apparent lack of action by cryptocurrency to protect consumers conducting transactions through their platforms.”

Krishnamoorthi questioned Coinbase “What mechanisms such as insurance coverage fraud or other criminal acts does Coinbase have in place to ensure that individuals harmed while using your services are recompensed? He extended his question and asked in which manner the Federal trade commission can help cryptocurrency exchange combat fraud and scams.  

U.S House Committee has sent a similar letter to several government departments like the commodity Future Trading Commission, the Securities and Exchange commission (SEC), Federal trade Commission and U.S Department of the Treasury.  

Krishnamoorthi, in his correspondence, invited government agencies for regulatory and policy suggestions and opinions on whether cryptocurrencies should be described as “commodities,securities or both.”

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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