The FTC held its “Decrypting Cryptocurrency Scams” workshop in Chicago on 25th June, aimed at protecting consumers who are “taking advantage of new and emerging financial technology.”
The half-day event brought together consumer groups, law enforcement, research organizations, and the private sector to explore how scammers are exploiting public interest in cryptocurrencies such as Bitcoin and Litecoin and to discuss ways to empower and protect consumers. The event, which was free and open to the public, was held starting at 1 pm Central Time at DePaul University located at 1 East Jackson Blvd., Suite 8005, Chicago, IL 60604. The event was webcast live.
Speaking during the event, Andrew Smith, director of the trade watchdog's Bureau of Consumer Protection, offered the figure and said that the figure could rise to the billions by the end of the year. Smith said consumers lost $542 million USD. If that trend holds, that figure could climb to $3 billion USD by the end of 2018, Smith said.
The FTC must balance protecting consumers and supporting innovators who “play by the rules,” said Smith. He recounted the FTC’s efforts to combat deceptive practices in its 2016 settlement with Bitcoin mining operation Butterfly Labs, which was prohibited
“from misrepresenting to consumers whether a product or service can be used to generate Bitcoins or any other virtual currency.”
Coin Center director of research Peter Van Valkenburgh said that people get sucked into fraud – from exit scams to pump-and-dump schemes – simply because they're looking to see a higher return on their investment.
Van Valkenburgh warned that people should not invest more money in cryptocurrencies than they were willing to lose.
“Bitcoin is a risky business…in general, ICOs are risky business.”