The Commodity Futures Trading Commission (CFTC) released a new circular dated Feb. 2, stating consumers should be wary of cryptocurrency retirement accounts claiming to be approved by the Internal Revenue Service. CFTC is warning investors to be cautious of sales pitches touting “IRS approved” or “IRA approved” virtual currency retirement accounts.
Taxpayers tend to focus on retirement savings more at tax time in order to increase deductions or maximize savings. As a result, some businesses may attempt to lure customers into buying highly volatile cryptocurrencies using false claims or by painting virtual currencies as less risky because they can be used for retirement saving.
CFTC also said that custodians and trustees of self-directed IRAs may have limited duties to investors and generally will not evaluate the quality or legitimacy of an investment or its promoters.
We have recently reported that the Senate Banking Committee will hold a hearing entitled “Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission” examining the implications of cryptocurrency.