Crypto Investors May Lose $3B, US FTC Believes

US watchdog representatives took part at consumer protection workshop on cryptocurrency scams
26 June 2018   1827

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.

Andrew Smith

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.

Joe Rotunda

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.

PBoC to Continue Anti-Crypto Propaganda

The regulator published a warning in its WeChat account called “Protection of the rights and interests of consumers of financial services”
23 March 2020   319

The People's Bank of China has returned to criticism of cryptocurrencies amid a worsening economic situation in the world.

On March 22, the regulator published a large-scale warning in its WeChat account under the heading “Protection of the rights and interests of consumers of financial services”. It describes three ways in which cryptocurrency service providers can mislead consumers.

First of all, the amount of fraud transactions with bots is serious. The average turnover rate of the top three overseas crypto currency exchanges is much higher than that of foreign licensed exchanges. Second, market manipulation exists in these exchanges where forced leveraged trading eventually causes the exchanges to explode. Third, money laundering is a big issue.


People's Bank of China

In addition, the Chinese Central Bank calls the opinion that Bitcoin may serve as a protective asset, erroneous. The regulator indicates its high volatility and recommends that citizens not follow the example of other investors and refuse to participate in cryptocurrency trading.