CFPB issues crypto warning after more than 8,000 complaints
The Consumer Financial Protection Bureau has received a cascade of complaints about crypto. Romance scams, theft, fraud, account hacking – you name it. The CFPB says it has received more than 8,000 crypto complaints over the past four years. And there aren’t many places for consumers to turn.
Most of the complaints involve fraud, according to the CFPB. It includes “pig slaughtering,” a romantic scam in which hackers gain victims’ trust, create crypto accounts, and empty them. You can browse the complaints on the CFPB website.
Here’s a sample: “All my funds disappeared.” “The mining site was a fraudulent mirror site from another company. It was a scam.” “I wired money to a person who was going to invest it in crypto…it was transferred to Bitcoin, then transferred to his crypto wallet. Please help. I’m devastated.”
But at this point there is not much the government can do. There just aren’t many regulations covering crypto investments. Right now, it’s buyer beware, said Mark Hays with the nonpartisan consumer group Americans for Financial Reform.
“These products are basically offered as a speculative investment opportunity,” he said. “And consumers should know that.”
But some current regulations should be expanded to cover crypto firms, Hays added. “If they offer bank-like products, such as deposits or accounts, they should be regulated as banks.”
Some companies in the crypto space say they are open to more regulation. However, different regulations are needed for unique crypto products like NFTs, said Farooq Malik, CEO of Rain, a software firm that transfers crypto to corporate credit cards.
In the meantime, crypto consumers should educate themselves and take responsibility for their own funds, he said. “It means you have a wallet that’s on the blockchain. You can keep your own assets in your wallet and your blockchain.”
When you rely on third parties to move your crypto, Malik said, you open yourself up to all kinds of scams.
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