CFTC Issues New Warning To Consumers About Utility Tokens & Other Cryptocurrencies

The Commodity Futures Trading Commission (CFTC) of the United States recently issues another warning to consumers in which it is advising them to exercise caution and carry out comprehensive research before investing in digital currencies – even if they are ones advertised as utility coins or consumption coins.

The alert came in the form of a Customer Advisory warning posted on the CFTC website this Tuesday. It is the 4th warning released by the regulatory body when it comes to cryptocurrencies and digital assets.

The purpose of this notice, according to CFTC, is to enlighten potential investors about the existing risks and threats in the cryptocurrency market. It has a title “Use Caution When Buying Digital Coins or Tokens,” and with that, it encourages customers to thoroughly research all claims, especially the ones made by initial coin offering (ICO) promoters.

The Director of the Office of Public Affairs and Office of Customer Education and Outreach at CFTC, Erica Elliot Richardson, made an official statement about the new regulatory effort, stating:

“This advisory is part of the CFTC’s education and outreach efforts to help educate and inform market participants, who, given the pace of technology-driven change, will increasingly come in contact with new financial products and services. The CFTC’s Office of Customer Education and Outreach closely coordinates with LabCFTC in order to keep pace with developments in the markets the CFTC regulates, and we look forward to staying ahead-of-the-curve in providing customers the information they need to protect themselves against fraud or manipulation in the marketplace.”

So, what we can conclude is that CFTC’s latest advice is for investors to be wary of coins and crypto schemes that overpromise or guarantee future value or return. The customers, on the other hand, are advised to view any such advertising as an investment red flag.

Previously, the CFTC has put three different warning notices about cryptocurrencies, including a warning about pump-and-dump schemes through crypto exchanges as well as a warning about coins and schemes advertising themselves as “IRS approved”.