The US CFTC has received a great number of complaints the concern the financial loss of ordinary American citizens who became the victims of so called “pump-and-dump” schemes that deal with virtual currencies. The commission is able to enforce anti-fraud measures in case virtual currency cash market are operated as a commodity in interstate commerce.
So, today it has announced a bounty with the following conditions:
If you have original information that leads to a successful enforcement action that leads to monetary sanctions of $1 million or more, you could be eligible for a monetary award of between 10 percent and 30 percent.
The US CFTC
The commission stresses out that such fraudulent schemes have always been present. And the nature of these schemes has no changed at all: false promises of groundbreaking products, major breakthroughs; then the demand grows along with share prices and finally at some point - prices crash and the investors are left with nothing. Nowadays, thanks to social media and messaging apps the organization of such schemes and the hype became anonymous.
The risk grows as the number of new virtual currencies and the respective tokens grows more rapidly in a mostly unregulated area of financial transactions. In order to protect oneself, CFTC recommends to:
- thoroughly study the virtual currencies using all the means necessary,
- guaranteed investment is a fiction,
- not to trust any ads and not to rely on a single tip of any token prior to purchase.
On the other hand, such bounties are often the stepping stones in establishing more legislative agenda and future enforcement budget. Certain actions on setting up the control have already been made by CFTC earlier this month with regulation workgroup and crypto fraud warnings.