Crypto Scams Could Cost Consumers Billions of Dollars This Year, FTC Says

Consumers lost $532 million to cryptocurrency-related scams in the first two months of 2018, an official for the Federal Trade Commission said Monday.

Speaking during an event focused on cryptocurrency scams and fraud, Andrew Smith, director of the trade watchdog's Bureau of Consumer Protection, offered the figure and said that the figure could swell into the billions by the end of the year.

"Consumers will lose more than $3 billion by the end of 2018," he told attendees of the event, which was live-cast on Monday.

This was an issue highlighted by Joe Rotunda, enforcement director for the Texas State Securities Board.

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.

"That is a message that needs to be repeated and repeated."

Rotunda said he believes that "Regulators need to be proactive in any type of new market, especially this type. We didn't have the public being pitched different types of investments like this on the scale a year ago. This is something that blew up late last year."

"Regulators need to number one, identify companies that are trying to do it right and work with [them]," he remarked.

"The companies that are trying to do it right [should] get a telephone call from the regulator, not a cease and desist order, right? Not a lawsuit. We can usually work with them ... [and] we need to identify the fraudulent schemes and we need to act quickly and stop them."

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