The statement was published today. It includes the latest investor warning from the U.S. commodities and derivatives regulator. CFTC already put a warning that urged caution around investing in cryptocurrency retirement accounts earlier this month.
CFTC joined the other regulator, Securities and Exchange Commission (SEC). which also warned about pump-and-dump schemes around ICOs.
According to the official release, investors should do a research before potentially buying a cryptocurrency. The statement focuses on crypto promotion in social media. Investors should not buy crypto based on social media tips or sudden price spikes. It is important to distinguish hype from facts.
CFTC described the methods by which the pump groups manipulate members to drive prices. They are false news reports about partnerships with small company and investor who plans to pour millions of dollars into a small, lesser-known cryptocurrency or coin.
CFTC is going to seek enforcement actions against those who organize such groups.