United States:
CFTC Releases First Pump-And-Dump Advisory Regarding Virtual Currency
02 March 2018
Kramer Levin Naftalis & Frankel LLP
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CFTC issued a Customer Protection Advisory warning customers to
beware of and avoid pump-and-dump schemes within thinly traded or
new "alternative" virtual currencies, digital coins or
tokens. For example, the advisory warned customers to avoid
purchasing virtual currency or tokens based on tips shared via
social media, as fraudsters will spread rumors encouraging
potential victims to react to a currency's or token's
rising prices before beginning the dump. In order to avoid falling
victim to such fraud, the CFTC encouraged customers to thoroughly
research potential investments, stay informed about tactics
commonly used in investment fraud and avoid investment
opportunities they don't fully understand.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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