Decrypting Cryptocurrency Scams: FTC Free Workshop on June 2018
The Federal Trade Commission will host a free to the public ICO workshop titled, “Decrypting Cryptocurrency Scams,” on June 25, 2018 in Chicago’s DePaul University at 1:00 pm Central Time. Registration is not required and the event will be recorded and streamed live here.
The event will focus largely on Bitcoin scams since they are the most prominent deceiving investors in business opportunities, pump-and-dump schemes, and mining operations. The Commission’s mission to hold cryptocurrency fraudsters accountable starts with educating consumers on such scams. Law enforcement, enthusiast organizations, and private sector will come together to navigate Bitcoin and ICO scams and how to best protect consumers. The workshop is organized by the FTC’s Bureau of Consumer Protection and the point of contact is Elizabeth Kwok at 202-326-2108.
FTC’s Continuous Cryptocurrency Involvement
The FTC has been fighting ICO scams since their inception in the capital markets space and in March 2018 formed a “Blockchain Working Group,” similar to the Commodity Futures Trading Commission’s (CFTC) LabCFTC in 2017 to best identify regulation structure for the novel technology. In 2014 federal courts sided with the FTC in shutting down Butterfly Labs for their “Bitcoin mining computers” scam, in which the FTC’s Bureau of Consumer Protection stated, “We often see that when a new and little-understood opportunity like Bitcoin presents itself, scammers will find ways to capitalize on the public’s excitement and interest.” In 2015 they halted another Bitcoin mining scam against Equiliv Investments and added a page to their website focusing on Financial Technology, similar to the CFTC’s Bitcoin webpage. This year their website added a investor alerts on the risks of cryptocurrency, like those published by the Securities Exchange Commission and the CFTC. Their largest regulatory action was this March when they sued two companies and four defendants for a Bitcoin pyramid scheme. Thomas Dluca, Louis Gatto, and Eric Pinkston promoted chain referrals through their companies Bitcoin Funding Team and My7Network, and a fourth defendant who marketed Jetcoin to recruit individuals in the pyramid scheme.
Cryptocurrency is Part of The FTC’s Mission Statement
That same day, the FTC announced their Blockchain Working Group. The purpose of the group is to equip the FTC staff with resources from Blockchain and cryptocurrency experts, facilitate communications and coordination on enforcement actions and other cryptocurrency projects, and serve as a forum for brain storming the new technology’s impact on the FTC mission to protect consumers. The Commission is expecting fraudsters to use old schemes with cryptocurrency and looks to apply this new working group expertise in identifying these schemes, as well as new ones.
In the original press release for the “Decrypting Cryptocurrency Scams” workshop, the FTC stated, “As consumer interest in cryptocurrencies has grown, so has interest from scammers, who are always looking for new ways to take advantage of consumers. . .As technological advances expand the ways consumers can store, share, spend, and borrow money, the FTC is working to keep consumers protected while encouraging innovation for consumers’ benefit.”
The “Decrypting Cryptocurrency Scams” event page can be found here, which includes a link to the live webcast on the day of the event.