The US Federal Trade Commission has banned fake reviews and recommendations. What does this mean for cryptocurrencies?
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According to the latest news, the decision introduces financial and administrative restrictions for individuals who “sell or buy fake social media influencer indicators.”
The FTC’s leadership unanimously supported the new rules, which will go into effect 60 days after publication in the Federal Register:
Fake reviews not only waste people’s time and money, but they also pollute the market and divert business from honest competitors.
Lina M. Khan, FTC Chair
The new policy also applies to crypto influencers. With the latest ban, dishonest methods of promoting a channel or page on a social network will lead to fines and sanctions from the authorities. The FTC will also prohibit the use of tools that use artificial intelligence technologies for such purposes.
The ban only applies to cases where the account owner specifically requested or otherwise facilitated the provision of such a service. The rules also mention that fines will be imposed if the methods are used to gain commercial advantage.
Social Media Investment Scams Continue to Rise
The FTC has recently noted a sharp rise in social media investment scams, particularly in cryptocurrency. These include fake messages promising guaranteed high returns with little or no risk.
FTC Consumer Education Specialist Andrew Raio noted that scammers are increasingly targeting social media users on major platforms with fraudulent investment opportunities, particularly in the cryptocurrency space:
If you answer, the scammer will say that he has made a ton of money investing in Bitcoin or another cryptocurrency. And he may provide you with a unique opportunity that guarantees significant profits with little or no risk. But this is all a lie 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 squeezed out as much money as possible, he disappears, leaving the victim with nothing.
Crypto-Romance Scams
The Federal Trade Commission (FTC) has also warned about cryptocurrency scammers offering investment advice under the guise of romantic partners.
The regulator noted that scammers build an emotional connection with you, making you more likely to believe that they are experts in cryptocurrency investing.
The scam usually begins with an unwanted contact on social media. The scammer carefully studies the victim’s profile to establish trust and a 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.
New restrictions are coming for the cryptocurrency sector
In addition to influential figures in the cryptocurrency sector, betting platforms have also come under close scrutiny from US authorities.
Earlier in August, the US Congress called on the Commodity Futures Trading Commission to ban political bets, saying they could influence the outcome of the US presidential election.
Five senators and three members of the House of Representatives sent an open letter to CFTC Chairman Rostin Benham, saying such mechanisms could undermine public confidence in the election system.
The initiative also targets the Polymarket betting platform, where crypto community members guess the outcome of the presidential election. According to the latest data, the volume of bets has exceeded $606 million. Vice President Kamala Harris is in the lead – users estimate her chances of winning at 53%, and 44% of those who placed a bet believe in the victory of former President Donald Trump.
At the same time, the total volume of the political section on the platform in terms of funds exceeds $1 billion. Polymarket participants place bets on hundreds of events.
American Politicians Suddenly Fall in Love with Cryptocurrencies
Despite the statements of individual regulators and government officials, politicians have also increased interest in cryptocurrencies in the run-up to the presidential election. In particular, Trump, who in 2018 instructed the US Treasury to put an end to Bitcoin (BTC), and in 2021 called it a fraud and called for regulation of the industry.
While Democrats have not explicitly stated their support for digital assets, they have not recently called for increased regulation or a ban. Additionally, if approved from above, the SEC would approve at least one of the documents needed to list an Ethereum ETF.
Thus, it is clear that American politicians have taken a course towards a loyal attitude towards cryptocurrency.
