When it comes to crypto, it’s buyer beware
The Consumer Financial Protection Bureau has received a cascade of complaints about crypto. Romance scams, theft, fraud, account hacks — you name it. The CFPB says it’s gotten more than 8,000 crypto complaints in the past four years. And there aren’t a lot of places for consumers to turn.
Most of the complaints involve fraud, according to the CFPB. That includes “pig butchering,” a romance scam where hackers get victims’ trust, set up crypto accounts, then empty them. You can scroll through the complaints on the CFPB website.
Here’s a sampling: “All my funds disappeared.” “The … mining page was a fraudulent mirrored page of 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, and then transferred to his crypto wallet. Please help. I’m devastated.”
But, at this point, there’s not a lot 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 fundamentally being provided as a speculative investment opportunity,” he said. “And consumers should know that.”
But some current regulations should be extended to cover crypto firms, Hays added. “If they’re providing bank-like products, like deposits or accounts, they should be regulated like banks.”
Some companies in the crypto space say they are open to more regulation. Different regulations are needed though for unique crypto products like NFTs, said Farooq Malik, CEO of Rain, a software firm that transfers crypto onto corporate credit cards.
In the meantime, crypto consumers should educate themselves and take charge of their own funds, he said. “What that means is, you have a wallet which is on the blockchain. You can hold your own assets within the wallet and your blockchain.”
When you rely on third parties to move your crypto around, Malik said, you expose yourself to all kinds of scams.
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