Congressman asks crypto exchanges about fraud

Whether we like it or not, we have to admit that the crypto exchanges is getting some bad rep and it is often deserved. Representative Raja Krishnamoorthi from Illinois recently sent letters to Coinbase, Kraken, FTX, KuCoin, and Binance asking how these organizations protect US citizens from fraudsters and bad actors.

The question of regulation is one that both crypto enthusiasts and skeptics discuss with passion. We do need regulations to ensure wide adoption in the nearest future. However, regulations often come with restraints that can significantly reduce the attractiveness of crypto assets in the eyes of people who believe in total decentralization and the necessity to avoid governmental control

We do not like the idea of being overseen by authorities, but the question asked by Mr. Krishnamoorthi is valid and deserves answers. Crypto exchanges must disclose more information about projects that they allow to be publicly traded. The congressman also sent the same letter to various federal agencies like the Treasury Department, SEC, CTFC, and FTC.

This specific politician, along with many other people who are considering or have already begun investing in cryptocurrency, is concerned about three things:

The absence of any oversight other than that which is performed internally by crypto exchanges.

The nature of the public ledger makes it impossible to undo any transaction, therefore it cannot be reversed.

The fact that many investors are uneducated and do not have a strong understanding of the technology at hand.

The latter problem appears to be the most significant one. Even though “do your own research” is chanted with almost a religious fervor throughout the crypto community, the vast majority of people who buy tokens typically do not know very much about the projects in which they are investing. This is despite the fact that the crypto community as a whole is obsessed with promoting independent research. It is possible for these enterprises to fail as a result of uncontrollable external forces, dishonest actions taken by the founders, or any other collection of difficulties that will be damaging to their own existence.

We have high hopes that the questions the congressman has asked will be answered to their satisfaction. In the same vein, we would like to remind everyone that it is in everyone’s best interest to educate themselves as much as possible regarding the tokens that they want to purchase. Keep in mind that there is an element of risk associated with any investment you make, and that in order to avoid any issues in the future, you need to make decisions that are well-informed.