FTC Opens Workshop On Cryptocurrency Scams

The US Federal Trade Commission announced it will educate investors and users on how to identify scams in cryptocurrency industry. The Federal Agency will host a free workshop, named “Decrypting Cryptocurrency Scams” on June 25 at 1 pm CT at DePaul University with a mission to help investors spot scams involving cryptocurrency businesses that promise instant profits or exponential profits. This workshop is open to public and will also be live-streamed on the US Federal Trade Commission’s website. The link will be posted on the day of the event.

Official Statement

As per the official statement, the “Decrypting Cryptocurrency Scams” workshop will focus on “how scammers are exploiting public interest in cryptocurrencies”.  The announcement states that “the workshop will bring together consumer groups, law enforcement, research organizations.” Moreover, the event discussion will shed a light on the best ways to empower and protect consumers.

Cryptocurrency Scams Follow the Hype

Cryptocurrency and underlying technologies such as blockchain are getting a lot of publicity lately. The appeal of independently created currencies that are not controlled by the government, for which supply depends on code and can deliver on fast P2P transactions that are cryptographically protected, have created a whole new asset class. The FTC and other government entities are concerned about cryptocurrencies and their impact on the economy, especially if there are large-scale scams or bubbles.

Scams Become Prominent as Bitcoin Prices Advance

2017 was the year of Bitcoin, and research also shows that the number of cryptocurrency scams jumped during the same year. The FTC has taken legal action against some of these scams, but it is not the first governmental entity to do so. The Securities and Exchanges Commission (SEC) and Commodity Futures Trading Commission (CFTC) have also focused on fighting scams within the space.

Previously, the FTC initiated legal action against four individuals. These individuals were operating Bitcoin Funding and My7Network which look like a pyramid scheme intended to defraud investors.

Private Sector Actors Join the Fight Against Scams

But legitimate cryptocurrencies have suffered the collateral damage of the scam hunt. On top of governmental agencies, prominent private sector actors like Twitter, Facebook and Google are continuously taking steps to “fight” against bad actors in the industry. These web 2.0 giants banned the advertisement of anything related to cryptocurrencies. Bitcoin and other legitimate cryptocurrencies got caught in their Crusade. The Federal Agency’s attempt at educating consumers about the risks involved in investing in cryptocurrencies and spotting scams has the potential to bring more understanding bout the scams and how to avoid them, but it can also have the effect that Google and Facebook bans had.