Categories
Bitcoin Daily: FTC Says Bitcoin Boom Draws Fraudsters; Basel Committee Advises Avoiding Crypto

Bitcoin Daily: FTC Says Bitcoin Boom Draws Fraudsters; Basel Committee Advises Avoiding Crypto

June 08, 2021 at 01:29AM
by PYMNTS

A recent bitcoin boom is attracting scammers, The Wall Street Journal (WSJ) reported, citing the Federal Trade Commission (FTC). The lack of regulation and the inherent anonymity have both played a part.

There were around $82 million in losses to crypto scams reported by customers during the fourth quarter of 2020 and first of 2021, according to WSJ.

That comes out to more than 10 times what the number was from the same six-month period the previous year, WSJ reported. But it goes along with the price of the digital coin, with Bitcoin rising around 450 percent and hitting around $59,000. Rival coins like Dogecoin and Ether also did well.

The scams have been widespread and indiscriminate, going after small investors using social media for tips on investing, as well as Wall Street veterans, according to WSJ.

Often, it’s hard to even gauge the correct numbers lost to fraud, as the FTC figures are only based on self-reporting by victims, WSJ reported.

In other news, the Basel Committee on Banking Supervision, a global banking regulator, will be putting out a consultation paper to help banks cut down their exposure to crypto, Cointelegraph reported. Previously, the group said there were financial security concerns surrounding cryptocurrency.

At a Friday (June 4) meeting, experts also said there are authorities seeking the approval of the committee, but that the committee’s word isn’t law. Rather, the committee relies on its members to enforce action, according to the report. There are members of the group hailing from Japan, the U.S. and several European companies.

In 2019, the regulator also said the digital coins were not safe to rely on as measures for exchanging or storing value, the report stated.

Lastly, analytics and business intelligence firm MicroStrategy has announced in a press release a selloff of $400 million of senior secured notes, the proceeds of which the company intends to use to buy more bitcoin.

The company already owns 92,079 bitcoins. Those, after the current sale, will now be held by a newly formed subsidiary called MacroStrategy LLC, the release stated.