CFTC will now pay for exposing fraudulent schemes

Whistleblowers may be awarded with a whopping $100,000
19 February 2018   203

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 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.

20 % of University Students gain Cryptocurrency with Aid

The Student Loan Report along with Pollfish interviewed 1,000 university students with related loan debt
23 March 2018   157

It took them for 4 days to collect the data (from March, 16 till March, 20 of this year). All the participants were to ask the following question: Have you ever use student loan money to invest in cryptocurrencies like bitcoin?

The results were remarkable. The poll revealed that 21,2  % of current students with the loan debt have used aid money in order to fund a cryptocurrency investment. So, over one-fifth answered in the affirmative.

Drew Cloud, the leader of the Student Loan Report, clarified that the younger Americans are more active investors as they are rather optimistic about cryptocurrency. Therefore the students want to get involved in this subject in any way possible. Drew Cloud sincerely thought the percentage would be lower. He considers that any college student's budget is thin and limited, therefore some extra money may be used on rest, groceries, or books.

The Student Loan Report approved: student loan debtors would be to pull off such a manipulation as they are given their remaining loans to be used on “living expenses”. From time to time they borrow more than they end up needing for studies. College debtors`spending of the money is not officially tracked and this allows the leftover means to be spent in the way preferred by the student. Another important factor is loan debt payments often do not occur until after graduation, and generally 6 months after.

Mr. Cloud claimed that cryptocurrency was the most prevalent investment of 2017. The young Americans consider that digital money is a savvy way to spend their refund checks. Some students even suggest that they would be able to quickly pay their debts off (because “not long ago every virtual currency was experiencing seemingly unstoppable growth”).

A significant shortcoming from the survey are data concerning how much the average student of the university spent of their financial aid on cryptocurrency. It also would have been interesting to know what types of digital means students favoured.