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The days of wild west cryptocurrency transactions may be coming to an end. Lawmakers in the US have started asking regulatory agencies and large crypto firms for details on how they work to protect consumers from scams. This could be the first step in deploying a regulatory framework that would tamp down some of the crypto world’s worst excesses, but the nature of crypto will make it harder to police than traditional finance.
Earlier this year, President Biden called on regulatory agencies to develop a plan for regulating digital assets, giving them 180 days to do so. In the intervening months, crypto prices have cratered, major exchanges have crumbled, and scams are only getting more prevalent. This week, the US House Economic and Consumer Policy subcommittee sent letters to four government agencies, including the Department of the Treasury, the Federal Trade Commission, the Commodity Futures Trading Commission, and the Securities and Exchange Commission. They also queried the largest crypto exchanges like Binance, Coinbase, and Kraken. The subcommittee letters ask for details on how each entity works to safeguard consumers against fraud. US regulators mostly have taken a hands-off approach with crypto thus far, fearing over-regulation could stifle innovation, but the time for action may be nigh. The FTC estimates that consumers have been hit with more than a billion dollars in fraud losses over the past 18 months, and the FBI announced this week that criminals had siphoned $1.3 billion in cryptocurrency from decentralized fina ..
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