Consumers lost $ 532 million due to crypto fraud in the first 2 months of 2018, reports CoinDesk.
Consumers will lose more than $3 billion by the end of 2018.
Director of Bureau of Consumer Protection, FTC
One of the main problems complicating the protection of consumers in this area is insufficient attention from investors themselves. This was pointed out by Joe Rotunda, enforcement director for the Texas State Securities Board.
Coin Center research director Peter Van Valkenburgh noted that people are victims of fraudulent schemes, such as exit-scams and pump-and-dump schemes, because they believe in proposals that are too good to be true.
I think nobody should ever buy any more cryptocurrency, put anymore [into] cryptocurrency than what they are completely willing to lose … if you are willing to participate at all. That is a message that needs to be repeated and repeated.[...] If you yourself are not capable of explaining to somebody what a token's supposed to do, you should not buy the token,. If you can't tell the wheat from the chaff, or what is techno-gibberish or actual innovation, you should not participate.
Peter Van Valkenburgh
Research director, Coin Center
Rotunda believes that regulators should take a more active position "oin any type of new market, especially this type" as a cryptocurrency one.
Regulators need to number one, identify companies that are trying to do it right and work with [them]. The companies that are trying to do it right [should] get a telephone call from the regulator, not a cease-and-desist order, right? Not a lawsuit. We can usually work with them ... [and] we need to identify the fraudulent schemes and we need to act quickly and stop them.
Enforcement director, Texas State Securities Board.
As reported, the event also saw calls for approaches to self-regulation, an idea that has seen advancement from both public and private sources in recent months.