The Federal Trade Commission (FTC) has announced in a recent blog post that they will be launching a ‘Blockchain Working Group’. The working group will aim to study the technology behind cryptocurrencies in order to protect consumers.
The working group will share cryptocurrency knowledge and resources between specially trained staff as well as hiring specialist consultants. The FTC say the blockchain working group has three goals:
“First, build on FTC staff expertise in cryptocurrency and blockchain technology through resource sharing and by hosting outside experts. Second, facilitate internal communication and external coordination on enforcement actions and other related projects. And third, serve as an internal forum for brainstorming potential impacts on the FTC’s dual missions and how to address those impacts.”
The blog post also notes that all ‘hot new technologies’ are subject to higher levels of fraud as the level of understanding from regulators and retail investors is low in the early stages. The FTC claim consumer protection is the primary motivation for developing a working group to gain a greater understanding of the crypto-asset space.
FTC Shuts Down Crypto Schemes
The blog post was not the only cryptocurrency related announcement that day, the FTC also announced they shut down ‘deceptive cryptocurrency schemes’. The FTC halted a number of cryptocurrency investment schemes and three defendants have been named so far. My7Network, Bitcoin Funding Team and Jetcoin were among the targeted schemes. The statement read:
“The defendants claimed that Bitcoin Funding Team could turn a payment of the equivalent of just over $100 into $80,000 in monthly income. The FTC alleges, however, that the structure of the schemes ensured that few would benefit. In fact, the majority of participants would fail to recoup their initial investments.”
The FTC has joined the SEC, FinCEN and CFTFC in actively prosecuting crypto schemes and scams. So far, all the regulatory bodies appear to be going after the easier open and shut cases. The SEC has been the most active body so far and is reportedly investigating over 80 ICOs.
Coupled with Facebook, Google and Twitter halting crypto related advertising the number of successful crypto scams will likely decline. However, it is uncertain whether these clamp downs will impact the innovative and legitimate sector of the crypto industry.
