U.S. Congress Petitions 5 Major Crypto Exchanges Over Anti-Fraud Infrastructure

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Summary:

  • A member of the U.S. congress sent a letter to five exchanges in the U.S. to inquire about their fraud mitigation systems.
  • Coinbase, FTX, Binance.US, Kraken, and KuCoin are the five crypto exchanges named in the press release on Tuesday.
  • Rep. Raja Krishnamoorthi’s letter also addressed the SEC and noted that federal laws fail to provide sufficient oversight for cryptos.
  • Crypto regulations remain unclear in the United States at press time.

Raja Krishnamoorthi, a member of the U.S. Congress and Chair of the Subcommittee on Economic and Consumer Policy, sent letters to five major crypto exchanges in a bid to find out how these exchanges have combated crypto-related fraud operations over the past decade. 

An official government press release published on Tuesday named the five digital asset platforms as Binance.US, Coinbase, FTX, Kraken, and KuCoin. Krishnamoorthi’s letters asked the exchanges to deliver feedback on their respective anti-fraud systems.

Furthermore, the inquiry requested information from as far back as 2009. 

Rep. Krishnamoorthi argued that the growth of fraud and consumer abuse linked to cryptocurrencies should be a concern for the U.S. government. However, the Congress member also noted that regulators have not agreed on a standard for the crypto industry, 

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.

Letters were also sent to four federal agencies including the Commodity Futures Trading Commission, Federal Trade Commission, U.S. Department of Treasury, and Securities and Exchange Commission (SEC).

Krishnamoorthi’s letter to the SEC in particular stressed that existing regulations do not provide sufficient oversight for the digital asset ecosystem and its associated operations.

U.S. President Joe Biden Signs Executive Order On Cryptos

Notably, U.S. President Joe Biden signed an executive order on cryptocurrencies back in March. The order instructed relevant agencies to conduct new work on cryptocurrencies and develop the first whole-of-government approach toward crypto regulation. 

According to the 120-day deadline given, the agencies are expected to provide feedback sometime in early September 2022. 

At press time, U.S. crypto regulations remain ambiguous with confusion over which agency would assume oversight for the industry. Crypto proponents have called out the SEC in particular for implementing vague securities laws and unfairly cracking down on companies like Ripple and Coinbase.

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