Decoded: Technology Law Insights, Volume 5, Issue 11

Spilman Thomas & Battle, PLLC

US Senator Urges Treasury Secretary Yellen to Take Action on Cryptocurrency Scams to Protect Investors

“'This is an unregulated industry, and the alarming amount of criminal activity surrounding cryptocurrency demands action,' he told Yellen."

Why this is important: Regulation in the crypto industry may be here sooner rather than later. Two weeks ago, U.S. Senator Rick Scott wrote to Treasury Secretary Janet Yellen to encourage her to act to help “protect consumers and legitimate investors from widespread cryptocurrency scams.” In his letter, Senator Scott pointed out the FTC research that found over the past year, crypto scams have increased by 1,000 percent and caused losses of more than $80 million. “[T]he median amount consumers lost in scams [is] $1,900.” Secretary Yellen already has voiced concerns about crypto as it pertains to facilitating illegal activity and tax evasion. Additionally, the Biden administration has begun to give us clues about how it intends to regulate crypto. Further, Comptroller of the Currency Michael Hsu has stated that he intends to work with the Federal Reserve, FDIC, and the states to examine how cryptocurrency fits within the banking industry. The days of unregulated cryptocurrency likely are numbered, but it will be interesting to see what the crypto landscape looks like when the various agencies figure out what to do with it. Hopefully by regulating crypto, the agencies do not kill the thing they are attempting to control.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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