U.S. Economic and Consumer Policy subcommittee demands inquiry into crypto scams

The United States House Oversight Committee’s economic and consumer policy subcommittee has recently demanded regulators answer on how they would tackle the crypto scams issue that has massively increased in the industry.

On August 30, Illinois eighth district congressional representative Raja Krishnamoorthi-led committee sent letters to Securities and Exchange Commission (SEC) Chair Gary Gensler, Treasury Secretary Janet Yellen, Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam, and Federal Trade Commission (FTC) Chair Lina Khan.

What steps crypto exchanges are taking to combat scams?

Additionally, he sent a note to cryptocurrency trading platforms seeking an explanation of the steps done to combat the widespread frauds and scams in the industry. 

“As stories of skyrocketing prices and overnight riches have attracted both professional and amateur investors to cryptocurrencies, scammers have cashed in. 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,” wrote Krishnamoorthi.

Even after the FTC reported that over $1 billion had been lost to cryptocurrency scams this year, the Congressman alleges in his letters that the federal government has made little headway in putting an end to cryptocurrency investment schemes. The FTC’s data also showed that phoney investment opportunities accounted for $575 million of all cryptocurrency fraud losses recorded to the FTC in 2021. 

Notably, in July, a U.S. senator also inquired about the approval process of Apple and Google to list crypto apps.

Without precise definitions and direction, he claims, agencies will continue to quarrel and won’t be able to put investor and consumer protections for cryptocurrencies and the exchanges where they are traded into place.

All of this occurs concurrently with an FBI warning to investors about scams on DeFi platforms, as TheCoinRise reported.The number of malicious actors attempting to take advantage of unwary investors are increasing as the cryptocurrency industry grows.