Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
The recipients have up to September 12 to reply to the letter and their response could inform their decision to craft a legislative solution.
The US authorities have doubled down their effort to combat fraud and protect American citizens in the latest effort focusing on crypto exchanges and regulators. In 2020 alone, over $1 billion in crypto was said to have been lost in fraud according to research by FTC.
As this could get worse in the future, four agencies including “the Department of the Treasury, the Federal Trade Commission, the Commodity Futures Trading Commission, and the Securities and Exchange Commission” have received letters of inquiries from the House Committee on Oversight and Reform.
Not just them, similar letters were issued to four crypto exchanges namely: Coinbase, FTX, Binance.US, Kraken, and KuCoin, requesting information and documents on what they are doing. The recipients have up to September 12 to reply to the letter and their response could inform their decision to craft a legislative solution.
Rep. Raja Krishnamoorthi, D.-Ill., Chair of the Subcommittee on Economic and Consumer Policy believes that stories of “crypto-made millionaires” have attracted both professional and amateur investors into the industry. For this reason, scammers have equally made huge gains from them.
“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 said.
According to the committee, the document to be produced should date back to Jan. 1, 2009, and should display an attempt made to “identify, investigate, and remove or flag potentially fraudulent digital assets or accounts,” and should also capture a discussion on the adoption of a more rigorous policy.
While the main idea behind the provision of documents containing comprehensive details of operation is unknown, a letter addressed to Sam Bankman-Fried, the CEO and founder of FTX gives a hint. The committee stated that some crypto exchanges list digital assets with little or no vetting while others do a review before bringing them on board. Concerns about the safety of crypto funds have been rising with the recent collapse of Voyager Digital and Celsius Network (CEL).
Krishnamoorthi in a statement mentioned that some agencies continue their infighting without clear definitions and guidance, and are unable to implement consumer protection on cryptos and exchanges.