According to reports, the US congressman has commenced the interrogation of Binance US over issues revolving around consumer safety. The CEO of Binance US, Brian Shroder recently received a federal letter requesting that the exchange provides official documents that confirms that the firm adheres to the investor-centric safety protocols. The exchange obtained the letter through a Subcommittee chairman under the United States House Committee on Oversight and Government Reform.
In the letter, a member of the subcommittee on Economic and Consumer Policy, Congressman Raja Krishnamoorthi, lamented the failure of crypto exchanges in collaborating with the government. Congressman Raja stated that crypto exchanges appear unwilling to help the government end financial fraud and safeguard investors.
Notably, the letter revealed the subcommittee’s concern about the rising financial crimes and consumer abuse. Also, it expressed concern over crypto exchanges hesitation to protect consumers carrying out transactions on their platforms.
In addition, Krishnamoorthi expressed uncertainty as regards the vetting protocols carried out by exchanges, listing tokens on their platforms. According to him, this vetting process heightens the risk for investors. As revealed, the Subcommittee contacted the exchange to produce various documents. This document will help the Subcommittee review the challenges.
U.S congressman issues September 12 deadline to Binance US
Notably, the congressman issued a September 12, 2022, deadline to produce all the required documents. Binance US is expected to avail all requested documents since it began operation.
In addition, Krishnamoorti, on behalf of US Congress, admonished crypto exchanges to take necessary precautions to ensure investors’ safety. According to him, implementing an audit policy, requesting certain disclosures, delisting, and adopting other safety mechanisms will go a long way.
Furthermore, Binance US CEO has also been asked to answer questions about how the exchange managed to fair well. The US congressman wants the exchange to state tools and mechanisms it implemented to limit risks, fraud, and scams.
According to a survey carried out by a media house in the United States amid the ongoing crypto crisis, about 46% of adult crypto users have encountered a loss in their investments. Quite a several users invested in crypto, believing it is a different way to make money. Also, investors thought crypto was an excellent way to make money.
Recall that Binance US manifested as a subsidiary of the leading crypto exchange, Binance. It offers crypto products and services to investors within the United States. Binance US completed its latest seed funding round VC on April 2, 2022. The exchange raised about $200M in the round.