The US Kepo Congress Against Crypto Exchange Companies Efforts To Protect Consumers

Coinbase is a crypto exchange company that is being watched by the US Congress. (photo: Twitter @coinbase)

JAKARTA - The US Congress wants to know what Coinbase, Binance.US, FTX, Kraken, and KuCoin are doing to tackle cryptocurrency-related scams. They are not just kepo, but want to ensure that customer safety in transactions is guaranteed

In a separate letter sent to any crypto exchange, the House Committee on Oversight and Reform expressed concern over fast growth from consumer fraud and abuse, as well as lack of action by cryptocurrency exchanges to protect consumers who make transactions.

The committee documents cited data from the Federal Trade Commission (FTC) showing that more than 46.000 people in the US have lost a combined USD 1 billion (IDR 14.8 trillion) of funds due to crypto fraud since early 2021.

In fact, the average individual lost US$2,600 (Rp 38.5 million). Investment and romance scams are very profitable for bad actors, each of which raised around US$575 million (Rp 8.5 trillion) and US$1855 million (Rp 2.7 trillion) from both schemes.

In addition, the letters also call for attention to issues relating to the list of scams used by scammers to "draw the carpet", or act of doubling the coin to increase its value, just to close the project and escape with the asset itself.

Lawmakers say some exchanges may allow digital assets to be listed with little or no inspection, preventing exchanges from finding potential vulnerabilities and putting users at risk of theft.

Legislators have reasons to worry about a list of scams. Coinbase is currently being investigated by the Securities and Exchange Commission (SEC) regarding whether they allow users to trade unregistered securities.

This particular investigation is separate from the case that charged former Coinbase employee with wire fraud. The former employee involved in the case allegedly informed his brothers and friends about the announcement of the upcoming list on the exchange, which is usually when the token value increases.

Government oversight of crypto has only increased amid a crypto crash that has sent stablecoin values plummeting, crypto companies bankrupt, and sparked mass layoffs. In July, the Commodity Futures Trading Commission (CFTC), the Federal Bureau of Investigation (FBI), and the Department of Justice (DOJ) announced that they were cracking down on crypto scammers in several forms. Each agent opened up cases against different fraudsters, all of which managed to escape millions or billions of dollars.

The Verge reported that the Committee asked FTX, Binance, Coinbase, KuCoin, and Kraken to provide documentation related to their efforts to prevent fraud, conduct audits, investigate lists of scams, and more. The company must submit documents no later than September 12, 2022. In addition to the exchange, the committee also asked the Treasury, FTC, CFTC, and SEC how they plan to tackle the scam.