New CFTC ICO advisory carries an important warning for buyers
A new advisory on crypto assets and ICOs issued recently by the CFTC (Commodity Futures Trading Commission) carries an important warning for buyers. Due to a large increase in ICO frauds, it is more important than ever for investors to do their research before giving their money away.
CFTC warns against fake ICOs
The CFTC has just released a new advisory concerning ICOs and crypto assets, in which it warns the would-be investors not to give away their money without properly investigating the ICO. The advisory, called ‘Customer Advisory: Use Caution When Buying Digital Coins or Tokens‘ once more repeats the words of warning initially said by the US SEC.
SEC has already warned about fake ICOs multiple times, even mentioning their own HoweyCoin ICO website, a fake ICO site created to educate users on ICOs and how to spot the false ones. The risks of investing in ICOs continue to grow, as scammers find new ways to trick people into investing. The large majority of them can even be easily recognized by promises of outsized returns, which are simply too good to be true.
So far, the SEC's main focus has been on managing crypto assets that posed a danger of bypassing the laws regarding securities. The CFTC, on the other hand, is seeking to clarify where these assets might be seen as financial products that are covered by its regulations.
According to the agency, digital coins and tokens have the potential of being seen as commodities or derivatives, but classifying them as such depends primarily on their structure. The CFTC even claimed that Bitcoin and similar cryptos were commodities, back in 2015. They even indicated that some of the modern cryptos, that are currently appearing on the market, might fall under their own purview.
So far, a lot of the agency's work in this specific area has been aimed at uncovering and preventing crypto-related types of fraud on the territory of the US.
It would seem that they have had a certain amount of success when it comes to this, and the agency has already had multiple civil lawsuits in the previous seven months. Additionally, there were some reports of the CFTC being involved in a certain probe that might be aimed at attempts of crypto market manipulation.