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The president and CEO of Binance US, Brian Shroder, got a letter from the government asking him to quickly hand over official documents that show the exchange follows different safety rules for investors. The request comes from the head of a subcommittee of the House Committee on Oversight and Government Reform in the United States.
In a letter to Shroder, Congressman Raja Krishnamoorthi of the Subcommittee on Economic and Consumer Policy pointed out that crypto exchanges aren't doing enough to help the US government stop financial fraud and protect investors. He wrote:
“I am concerned by the rapid growth of fraud and consumer abuse. I am also concerned by the apparent lack of action by cryptocurrency exchanges to protect consumers conducting transactions through their platforms.”
Krishnamoorthi was skeptical about the process of vetting that goes into listing tokens on crypto exchanges. This raises the risks for investors in the end. The Subcommittee asked Binance US, which is a branch of the largest cryptocurrency exchange Binance, to send them different documents to help them figure out how serious their concerns are.
Since it started doing business, Binance US will have to show all of the documents that have been asked for. It has less than two weeks, until September 12, 2022, to do so.
Krishnamoorthi, speaking on behalf of the US Congress, said again that crypto exchanges must take proactive steps to make sure investors are safe. "By implementing audit policies, requiring certain disclosures, delisting, and adopting other safety mechanisms," he said.
Shroder has been asked for the documents and to answer questions about the tools and systems used by the exchange to reduce risks, fraud, and scams.
A recent survey showed that 46% of adult crypto users in the US lost money on their investments during the crypto winter.
A vast majority of the respondents tried investing in cryptocurrency while looking for a “different way to invest,” and thought it was a “good way to make money.”
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