The head of the House Subcommittee on Economic and Consumer Policy has written to numerous federal agencies and cryptocurrency exchanges asking for input on how they deal with crypto fraud.
Rep. Raja Krishnamoorthi said in a press release Tuesday (Aug. 30) that scammers have enlisted the help of professionals and amateur investors.
"Coin mining is a preferred transaction method for scammers due to the absence of a central authority to flag suspicious transactions in many situations."
Krishnamoorthi, an Illinois Democrat, wrote the letter to the US Department of Treasury, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC), as well as the digital asset exchanges Binance, Coinbase, FTX, Kraken, and KuCoin.
Read more: The SEC focuses on small cryptos to strengthen its oversight case.
Although the private sector has taken steps to combat cryptocurrency fraud, there is still a significant danger, according to him.
According to the release, consumers are often unaware of the varied resources available to them to inform their cryptocurrency investing decisions, and insurance companies are hesitant to provide coverage to individual consumers due to a lack of regulation of digital assets.
Krishnamoorthi's request came on the same day that the FBI warned that cyberthieves are increasingly targeting decentralized finance (DeFi) platforms, urging investors to do thorough research and telling platforms to enhance monitoring and code testing.
DeFi's "complexity of cross-chain functionality and open source nature" make it simpler for cybercriminals to exploit "investors' increasing interest in cryptocurrencies," according to the FBI's Internet Crime Complaint Center.
According to the notice, nearly 97% of the $1.3 billion taken from DeFi platforms were taken by cyberthieves in the year 2021, and a 30% increase in comparison to 2020. These platforms do not employ third parties to perform financial transactions on the blockchain, and have been the targets of numerous attacks this year alone.