US Congress investigates $1bn in crypto fraud
Officials have sent out a demand for information to all major exchanges
They are accused of “inaction” as well as delaying detection of such crimes
Exchanges have until September 12 to disclose data
Yesterday, August 30, the US Congress sent letters to several cryptocurrency service providers. Coinbase, Binance US, Kraken, FTX and Kucoin, among others, received the appeal. Officials are demanding that the organisations report on their anti-fraud practices and provide all documentation.
The House of Representatives noted that they see “inaction” by the major venues in the fight against fraud and are demanding a change in their stance. It is possible that this could affect the regulatory backdrop around cryptocurrencies in the US.
The 4-page letter included a questionnaire with several questions, as well as a requirement to provide all information on investigations into fraud precedents since 2009. Otherwise companies will face sanctions.
The documentation has to be submitted by 12 September. On the basis of the feedback received, the Congress plans to develop a new regulatory framework for dealing with cryptocurrencies.
“Given the current popularity of cryptocurrencies both as a form of payment and as an investment, I am concerned about the rate of increase in crime in this area and the number of acts of abuse by users,” said Raja Krishnamurthy, chairman of the economic and consumer policy arm of the House Committee on Oversight and Reforms.
He also noted that this year alone the level of losses in the cryptocurrency industry from the actions of criminals exceeded $1 billion. The same amount appeared earlier when the FBI issued a public warning to investors.