The U.S. Consumer Financial Protection Bureau has revealed that it is probing several cryptocurrency companies over different types of deceptive ads.
The head of the CFPB, Richard Cordray, confirmed the fact during a speech in Washington on Tuesday. He added that the bureau had now received more than 1,200 complaints from consumers about cryptocurrency and ICOs (Initial Coin Offerings).
Cordray said: “We do not have the full picture yet, but what we have seen so far is deeply troubling […] These consumers are having money stolen from them in a matter of seconds.”
Deceptive Ads To Undergo Strict Investigation
The CFPB is looking into crypto companies that may have been engaging in deceptive or unfair practices. The investigation is part of a wider probe into cryptocurrency-related firms, including initial coin offerings (ICOs).
“We’ve heard from a lot of consumers who lost money to deceptive ads and other scams linked to this emerging industry,” said Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), according to Reuters. “We want to make sure we understand how these companies operate before making any enforcement decisions.”
The CFPB has received more than 1,200 complaints from consumers about crypto and ICOs since 2016, including allegations of misleading or false advertising claims about their products.
The U.S. Consumer Financial Protection Bureau has revealed that it is probing several cryptocurrency companies over different types of deceptive advertising.
The regulator is looking into ads that claim consumers can make huge amounts of money quickly, as well as those which suggest they can quit their jobs and live off cryptocurrencies alone.
A CFPB spokesperson told CNBC: “We are aware of this emerging industry and we are monitoring developments closely.”
The head of the CFPB, Richard Cordray, confirmed the fact during a speech in Washington on Tuesday. He added that the bureau had now received more than 1,200 complaints from consumers about cryptocurrency and ICOs (Initial Coin Offerings).
“The majority of these complaints involve fraud or bad products sold through online advertising,” he said. “And we are seeing an increase in scams involving cryptocurrency.”
Cryptocurrencies are not a get-rich-quick scheme, nor are they a safe investment for most people. In fact, while they may seem like an attractive investment opportunity at the moment due to their soaring prices, cryptocurrencies have historically been extremely volatile (the value of Bitcoin has dropped more than 90% from its peak in December 2017). It’s also important to remember that cryptocurrencies aren’t regulated by any central bank or government agency; as such, if something goes wrong with your investment and you lose money on it then there won’t be anyone there who will help you out or compensate you for your losses.
