The US Federal Trade Commission has banned fake reviews and recommendations. What does this mean for cryptocurrencies?
according to latest newsThe decision imposes financial and administrative restrictions on individuals who “sell or buy fake indicators for social media influencers.”
The FTC leadership unanimously supported the new rules. The new rules will go into effect 60 days after they are published in the Federal Register:
Fake reviews not only waste people’s time and money, they pollute the market and divert business away from honest competitors.
Lina M. Khan, Chairwoman of the Federal Trade Commission
The new policy also applies to crypto influencers. With the latest ban, unfair methods of promoting a channel or page on a social network will result in fines and penalties from authorities. The Federal Trade Commission will also ban the use of tools that use artificial intelligence technologies for such purposes.
At the same time, the ban applies only to cases where the account holder specifically requests or otherwise facilitates such a service. The rules also provide for fines if the mentioned methods are used to obtain benefits for commercial purposes.
Recently, the Federal Trade Commission He noticed There has been a sharp increase in investment scams on social media, especially in the cryptocurrency space. These include fake messages promising guaranteed high returns with little or no risk.
Andrew Raiu, a consumer education specialist at the Federal Trade Commission, noted that scammers are increasingly targeting social media users on major platforms with fraudulent investment opportunities, especially cryptocurrencies:
If you respond, the scammer will say that he has made a lot of money investing in Bitcoin or another cryptocurrency. He may offer you a unique opportunity that guarantees you huge returns with little or no risk. But these are all lies designed to convince you and get your money.
The victim is redirected to a fake investment site or app where their investment account appears to be profitable. However, once the scammer has managed to extract as much money as possible, they disappear, leaving the victim with nothing.
Cryptocurrency Romance Scams
The Federal Trade Commission has also warned of cryptocurrency scammers who offer investment advice under the guise of romantic partners.
The regulator noted that scammers build an emotional bond with you, making you more likely to believe they are experts in cryptocurrency investing.
The scam usually begins with an unsolicited contact via social media. The scammer carefully studies the victim’s profile to build trust and connection. Once a relationship is established, the conversation turns to investments, with the scammer claiming that their top priority is the victim’s financial security.
More restrictions on the crypto space are coming
In addition to crypto influencers, betting platforms have previously come under scrutiny from US authorities.
Earlier in August, the U.S. Congress called on the Commodity Futures Trading Commission to ban political betting, which authorities said could influence the outcome of the U.S. presidential election.
Five senators and three House members sent an open letter to Commodity Futures Trading Commission Chairman Rustin Benham, saying such mechanisms would undermine public confidence in the electoral system.
The initiative also targets the Polymarket betting platform, where members of the crypto community guess the outcome of the presidential election. According to the latest data, the betting volume exceeded $ 606 million. Vice President Kamala Harris is in the lead – users estimate her chances of winning at 53%, and 44% of people who placed a bet believe in the victory of former President Donald Trump.
At the same time, the total funds allocated to the political section of the platform exceed $ 1 billion. Polymarket participants bet on hundreds of events.
Suddenly, American politicians have fallen in love with cryptocurrencies.
Despite statements from individual regulators and government officials, politicians have also increased their interest in cryptocurrencies in the run-up to the presidential election. In particular, Trump instructed the US Treasury Department in 2018 to end the use of Bitcoin (BTC), and in 2021, he called it a scam and called for regulation of the industry.
While Democrats have not explicitly declared their support for digital assets, they have not recently called for increased regulation or prohibition. Moreover, with approval from the top, the SEC would have approved even one of the documents required to list an Ethereum ETF.
Hence, it is clear that American politicians have taken a path of taking a loyal stance towards cryptocurrencies.
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