How CFTC Handle Crypto Ponzi Scheme Cases - Their Measures
"Recent global conflicts have demonstrated how people who threaten the American economy and the public, in general, can use digital assets," Behnam stated. Following Terra's dip, which sent shockwaves through the cryptocurrency market, the CFTC Chairman spoke out.
According to CoinMarketCap data, the market value of all cryptocurrencies has dropped by approximately 350 billion dollars in the last few days. Terra's LUNA and the algorithmic stablecoin UST were not left out, in addition to Bitcoin, Ethereum, and a few other cryptocurrencies.
According to Behnam, since 2015, the CFTC has taken different steps to stop illegal activity. In the previous fiscal year, 23 of these procedures were made public. According to him, accusations of fraud were made in nearly half of all crypto-related cases. "I also urge everyone here today to continue supporting regulations that will make these markets more open, safe, and stable," Behnam said. I've stated numerous times that cryptocurrency markets are unique and would benefit from federal market oversight.
CFTC joins SEC in dealing with cryptocurrency-related issues
The CFTC regulates derivatives markets in the United States. However, it is not the only organization that has stated a desire to hire more cryptocurrency experts. The Securities and Exchange Commission (SEC) of the United States announced earlier this month that it would employ 20 more people for its crypto investigations division. This division has been renamed the "Crypto Assets and Cyber Unit."
The division's main aim will be to oversee cryptocurrency exchanges, lending and staking services, Decentralized Finance (DeFi) projects, stablecoins, and the NFT industry. According to a Fox Business report on Wednesday, May 18, SEC Chairman Gary Gensler is concerned that even more investors will lose money in the coming years.
"I think a large number of these tokens will fail. So I am concerned that in crypto, many people will be hurt. This will undermine market confidence to some extent." Gensler told reporters after the House Appropriations Committee hearing.
5 Steps Provided By CFTC to Take after Discovering Fraud
CTFC has provided the following measures. These steps can be taken after discovering fraud
1. Don't pay any more money
This may seem obvious, but some Ponzi schemes use the promise of large profits to convince victims to pay one fee after another, even if they suspect something is wrong.
Online fraud has increased dramatically over the past few months. Most legitimate brokers will deduct commissions and fees from your account but not ask for additional money to release your profits or earnings.
Be vigilant and beware of schemes that seek to steal money. These cons target recently victimized victims. They claim to be able to recover their money in exchange for an up-front fee "donation," retainer, or back taxes. It is also important to note that perpetrators of advance fee fraud pose as government officials, attorneys, or recovery firms.
2. Collect all the pertinent information and documents
Create a timeline and collect documents and other details that will be useful when you investigate the fraud. You are to do this while the event is still fresh in your memory. Also, note the dates and times of any conversations with fraudsters that you have on record.
3. Protect your identity and account
If you have provided payment information to criminals, you must prevent access to your account and protect against identity theft.
4. Report the fraud to the authorities
Ensure you report to the CFTC if you believe you have been a victim of fraud involving cryptocurrency, commodity futures, commodity pools, foreign exchange, binary options digital assets, or other derivatives.
If you are a victim of any other kind of fraud but do not know where to file a complaint or where to send it, the Department of Justice maintains a directory that can assist you. In addition, federal agencies work together and will forward your complaint to the appropriate agency.
If the fraud occurred in your neighborhood, you might also notify the police and the district attorney. In addition, you may need to conduct a police investigation if you intend to file an insurance claim for fraud-related losses.
5. Consider changing behaviors and building your resistance to fraud.
Fraudsters are highly competent at their craft and frequently target prosperous and educated individuals. First, however, you should consider the circumstances and actions that led to the scam.
In many instances, routine activities can make people become targets. Then, repeating the same actions can result in the same outcome. This could include participation in social media forums and chat rooms. Posting comments on videos, registering for trading courses or special offers, and free giveaways and investor newsletters.
The exact numbers are unavailable because people rarely report fraud, and fraudsters frequently target victims. As stated previously, victim lists accessible on the dark web are often the source of recovery fraud. Additionally, fraudsters can sell your personally identifiable information and vulnerabilities to other con artists. Therefore, awareness is the best way to strengthen your defense against fraud.