During a recent Senate Banking Committee hearing, Senator Elizabeth Warren (D-MA) voiced concerns over the rising threat of cyber criminals exploiting cryptocurrency to defraud American consumers, with reported losses exceeding $2.5 billion in 2022, marking a staggering 183% increase in just one year.
According to the FBI, crypto-related investment fraud now surpasses all other forms of investment scams.
Senator Warren emphasized the urgency of addressing this issue, stating, “Americans are falling victim to scams facilitated by cryptocurrency at an alarming rate, jeopardizing their hard-earned money.”
The focus of the hearing shifted to stable coins, including Tether and USDC, which were believed to offer stability due to their pegging to the dollar.
However, recent data revealed that stable coins are now implicated in over 70% of known crypto scams, raising eyebrows among lawmakers.
Consumer protection expert, Ms. Carla Sanchez-Adams, underscored the deceptive nature of stable coins, asserting, “Stable coins are not as stable as they claim, serving as gateways to unsafe and dangerous crypto assets.”