US Congress Asks Crypto Exchanges How They are Preventing Crypto Frauds

Congress sent letters to five well-known cryptocurrency exchanges in the U.S. asking for details on their anti-fraud initiatives.

The inquiries are a part of the most recent effort by Congress to impose stricter regulations on the cryptocurrency market in the United States, which is still trying to decide which of its numerous regulatory bodies should be in charge of it.

The battle against fraud and scams in Congress

Four federal agencies & five crypto exchanges in the U.S. received letters from Congress earlier this week. The letters, which Rep. Raja Krishnamoorthi sent, ask for details regarding the measures exchanges and authorities are taking to combat cryptocurrency fraud and frauds.

The representative requested records and documentation demonstrating how Coinbase, FTX, Binance.US, Kraken, and KuCoin recognized and dealt with counterfeit cryptocurrency and accounts on their systems back in 2009.

Congress also asked the exchanges to provide details on the methods and instruments they employed to reduce the risk of fraud. The businesses have until September 12 to respond, along with recommendations for steps the federal government should do to reduce the prevalence of cryptocurrency fraud.

The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Trade Commission, and the U.S. Department of Treasury have all been asked to provide data on how they are defending consumers in this area.

The U.S. House of Representatives’ primary investigative committee has a subcommittee on economic and consumer policy, which Rep. Krishnamoorthi chairs. The committee, which has authority over a wide range of public issues and the ability to enact new laws or amend existing ones, is one of the House’s most significant and potent bodies.

The committee’s first encounter with the cryptocurrency sector may inspire further involvement. Many people think that Congress’ increased interest in enacting tighter consumer protection laws in the business was prompted by the recent failure of Voyager and Celsius.

Even though numerous federal authorities in the country control every aspect of the financial industry, the cryptocurrency market in the United States remains mostly unregulated.

Krishnamoorthi wrote in the letter to the SEC:

“Existing federal regulations do not comprehensively or clearly cover cryptocurrencies under all circumstances. Debates continue among U.S. government authorities as to whether cryptocurrencies should be treated as securities, commodities, or both in various circumstances. 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.”