Key Takeaways:
- The committee sent a letter to the Department of the Treasury, FTC, CFTC, SEC, Coinbase, FTX, Binance.US, Kraken, and KuCoin.
- The crypto exchanges produce all documents starting from January 1, 2009, which display efforts to combat crypto scams by September 12
- The letter seeks the opinion of government agencies on whether cryptocurrencies should be defined as “commodities, securities, or both.”
The US House Committee on Oversight and Reform is increasing its watch over the Web3 space.
On Tuesday, the committee sent a letter to the Department of the Treasury, the Federal Trade Commission, the Commodity Futures Trading Commission(CFTC), the Securities and Exchange Commission(SEC), and five crypto exchanges — Coinbase, FTX, Binance.US, Kraken, and KuCoin seeking information on their crypto scam and fraud prevention methods.
The four-page letters ask that the exchanges produce all documents starting from January 1, 2009, which display efforts to combat crypto scams, and show attempts made to “identify, investigate, and remove or flag potentially fraudulent digital assets or accounts,” as well as highlight discussions around “whether to adopt more stringent policies.”
The government agencies and crypto exchanges are also expected to respond by September 12 with information about what they are doing to protect consumers. The committee states that these responses could be used to craft legislative solutions.
Rep. Raja Krishnamoorthi—Chair of the Subcommittee on Economic and Consumer Policy of the House Committee on Oversight and Reform, wrote the letter highlighting that cryptocurrencies have become scammers’ favored means of payment as well as their preferred bait for unsuspecting victims.”
“Given the growing popularity of cryptocurrencies both as a form of payment and as an investment, I am concerned by the rapid growth of fraud and consumer abuse,” he wrote.
Further in his letter, he stated that the agencies often seem to be acting at cross-purposes and giving inconsistent guidance to private-sector players. “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,” he said.
The letter also asks the government agencies for regulatory and policy suggestions and their opinions on whether cryptocurrencies should be defined as “commodities, securities, or both.” According to a report from FTC, over $1 billion in crypto has been lost to fraud since the start of 2021.
Very Recently, Patrick Hillmann, chief communications officer of the world’s largest exchange, Binance, became a victim of a scam. The scammers used Patrick’s Deepfake AI hologram to trick users into online meetings and target the projects of clients of the company.
With concerning levels of crypto scams plaguing the market, the US Committee’s latest letter may hint toward future regulation in the highly unregulated crypto and digital asset sector.
