FTC, States: in 2018, the people will lose more than $3 billion for ICO Scam

Consumers lost $532 million because of the actions of the crypto scams in the first two months of 2018. On Monday said the official representative of the Federal trade Commission (FTC).

Speaking during the event devoted to fraud in the industry of cryptocurrencies, Andrew Smith (Andrew Smith), the Director of the Bureau of consumer protection, announced that data and said that this figure could increase to $3 billion before the end of the year.

One of the main problems is the lack of concern by the investors. It was noted by Joe Rotunda (Joe Rotunda), Director of legal Affairs of the Council for the securities of the state of Texas. Especially sharply this problem stands at the background of huge growth — and subsequent decline – the price of the cryptocurrency over the last six months.

Director of research at Coin Center, Peter van Valkenburg (Van Valkenburgh Peter) said that people are caught up in fraud – from counterfeit to ICO schemes «pump and dump» — just because they seek to obtain higher returns on their investment.

«I think that no one should ever buy more crypto-currencies, and invest in them more than he is ready to lose… if not going to participate in such investment,» said van Valkenburg. «This message should sound more often, the better».

Rotanda said that «regulators should be proactive in any new market, especially in this case. A year ago there were not so many people involved in such investments. This boom began at the end of last year.»

«First and foremost, regulators must identify companies that work honestly and cooperate with them,» he said. «Those companies that work honestly, should receive a friendly phone call from the regulator, and not a restraining order or a lawsuit. We can cooperate with them… and to figure out the fraud and stop them, we must act quickly.»

As expected, the event also saw calls for self-regulation — the idea that in recent months, increasingly heard from both the authorities and private companies. In the end, the discussion boiled down to a General recommendation: investors should exercise due diligence.

«If you can’t explain someone what is the token, you should not buy it,» said van Valkenburg. «If you can’t separate the wheat from the chaff, or true technological innovation from the high-profile statements, you don’t have to participate.»

The FTC is not the first time drew attention to the scams in the cryptocurrency industry. In March this year, the Federal trade Commission filed
two lawsuits against «fraudulent cryptocurrency schemes» allegedly deceived a 30 000 people. The concern of the regulators is not groundless – with the rise of the ICO at the end of last year, the number of scams in industry has increased significantly.

In this regard, the authorities began to take steps in order to prevent the operation of fraudulent schemes and warn investors. In may this year, regulators in the U.S. and Canada began
the joint fight against cryptocurrency scams, running Cryptosweep. In the same month, the SEC created
the website with the «fraudulent ICO» for the education of investors. Users who try to invest in the sale of tokens will be redirected to a page on the SEC website contains information allowing to identify a fake ICO.

However, it should be noted that not only the regulators concerned about the situation of companies in the industry are also trying to take part in the fight against fraud. Recently, the Upbit exchange paid
the reward of cryptocurrency scams – 1 million won ($931) each applicant. Startup Savedroid went further and in April of this year played
fraud own ICO to draw investors ‘ attention to the problem of fake fundraisers.

However, despite the best efforts of regulators and cryptocurrency companies, scammers still manage to deceive a large number of investors. In may this year the Australian Commission for the protection of consumers (ACCC) said that in 2017 the Australians lost about 2 million Australian dollars (AUD) as a result of frequent cases of fraud related to cryptocurrency.

This spring we published
instructions on how to avoid becoming a victim ICO Scam. It is worth exploring to anyone in the community before you invest.

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