US Commodities Regulator Warns on Crypto Retirement Scams

Consumers should be wary of cryptocurrency retirement accounts claiming to be approved by the Internal Revenue Service, the Commodity Futures Trading Commission (CFTC) has warned.

In a new circular dated Feb. 2, the CFTC is calling for people to “be cautious” about such pitches, especially those claiming that the U.S. tax authority had in some way reviewed or endorsed the product. The IRS, the CFTC noted, “does not approve or review investments for IRAs.”

The agency went on to write:

“Taxpayers tend to focus on retirement savings more at tax time in order to increase deductions or maximize savings. As a result, some businesses may attempt to lure customers into buying highly volatile cryptocurrencies using false claims or by painting virtual currencies as less risky because they can be used for retirement saving.”

As previously reported by CoinDesk, individual retirement accounts involving cryptocurrencies aren’t exactly new. But the CFTC circular indicates that some pitches being made to U.S. taxpayers in recent do not disclose all of the relevant risks – or are outright fraudulent.

“Custodians and trustees of self-directed IRAs may have limited duties to investors and generally will not evaluate the quality or legitimacy of an investment or its promoters,” the agency said in its release.

The CFTC has taken an increasingly proactive role in regulating activities around cryptocurrencies, including a recent move to beef up its scrutiny of proposed financial products including futures. Agency chairman, J. Christopher Giancarlo, is set to appear before the Senate Banking Committee on Feb. 6 to discuss the CFTC’s oversight of the market.

CFTC emblem image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Comments

comments

Filed in: Bitcoin Buzz Tags: ,

You might like:

South Korea Legitimizes Blockchain Industry With Major New Classification Standards South Korea Legitimizes Blockchain Industry With Major New Classification Standards
The History of Tezos: The Infamous ICO Trying to Rebound Amidst Lawsuits and Disputes The History of Tezos: The Infamous ICO Trying to Rebound Amidst Lawsuits and Disputes
BIS Chief Bashes Cryptocurrency Again in Scathing Review of Its ‘Failure’ as Money BIS Chief Bashes Cryptocurrency Again in Scathing Review of Its ‘Failure’ as Money
Former Jefferies Asia CEO to Lead $1 Billion EOS VC Arm Former Jefferies Asia CEO to Lead $1 Billion EOS VC Arm
IBM Signs $740 Million Deal With Australian Gov’t to Use Blockchain for Data Security IBM Signs $740 Million Deal With Australian Gov’t to Use Blockchain for Data Security
Deadline for Implementing Indian Central Bank’s Ban on Crypto Dealings Ends Deadline for Implementing Indian Central Bank’s Ban on Crypto Dealings Ends
Collectable Crypto Game Introduces Personalized Artist-Designed Avatars Collectable Crypto Game Introduces Personalized Artist-Designed Avatars
Immutability in Doubt: Do We Need to Protect Blockchain Data? Immutability in Doubt: Do We Need to Protect Blockchain Data?
© 2018 Virtual Mining Bitcoin News. All rights reserved. XHTML / CSS Valid.