Not to be outdone by SEC's recent ICO market scrutiny, the Commodity Futures Trading Commission (CFTC) has issued a new guideline report that seeks to alert customers on how to exercise caution before making the option actually to purchase the tokens. The advisory publication entitled “Customer Advisory: Use caution when buying Digital tokens or coin,” is a form of unofficial warning to customers looking to invest in value from the cryptocurrency market.
“The market for digital coins and tokens is still very young, and there is no widely accepted standard for placing a value on a particular digital coin or token. That includes coins or tokens sold today with the claim that they can be used to purchase goods, services, or platform access in the future,”
the report reads.
The CFTC is, therefore, advising customers to ensure that they understand the future value of the crypto token they are investing in and the underlying factors that could potentially affect the cost. The agency also seeks to emphasize that research is the best way to protect crypto investors’ finances.
— CFTC (@CFTC) July 18, 2018
CFTC's End Game
The purpose of CFTC's advisory notice is to enlighten potential crypto investors on the risks and threats the market has in place. The advisory caution also encourages crypto investors to thoroughly conduct research on token claims and find out enough information on the crypto promoters and companies.
Director of the Office of Customer Education and the Office of the Public Affairs within CFTC, Erica Elliot added:
“The advisory is part of CFTC's education and outreach efforts to educate and inform crypto market participants, who, given the pace of technology-driven change, will increasingly come in contact with new financial products and services. The Office of Customer Education and Outreach coordinates with Lab CFTC to keep pace with developments in the markets the CFTC regulates, and we look forward to staying ahead-of-the-curve in providing customers the information they need to protect themselves against fraud or manipulation in the marketplace.”
CFTC's Informative Efforts
Digital tokens and coins are fast becoming derivatives or commodities which are promising plenty of returns for the crypto investors. CFTC's latest warning issue mirrors past efforts by the firm to secure global investors as this marks the fourth warning on such entities. Similarly to the US SEC, the CFTC is only seeking to help crypto investors take advantage of Blockchain’s massive potential in a safe and regulatory environment.