US consumer watchdog probes crypto firms over deceptive ads

Several cryptocurrency companies face investigations from the U.S. Federal Trade Commission (FTC) for possible deceptive or misleading advertising related to cryptocurrencies.

According to December 6th report FTC spokeswoman Juliana Gruenwald told Bloomberg that the watchdog is investigating “several companies for possible fraudulent activity involving digital assets.”

Gruenwald did not provide further details about which companies were the target of the investigation or what prompted the investigation.

However, deceptive advertising and promotions have become a hot topic in the United States this year.

In October, reality TV star Kim Kardashian was accused of making a “social media pitch” without disclosing that she received $250,000 to promote the cryptocurrency Ethereum Max (EMAX). I was fined by the Trade Commission (SEC).

In November, NFL quarterback Tom Brady and NBA point guard Stephen Curry faced investigations from financial regulators in Texas over their promotion of bankrupt cryptocurrency exchange FTX. He was reportedly among a group of celebrities who

The FTC is an independent United States agency established to protect the public from fraudulent or unfair business practices through law enforcement, investigation, and education.

Earlier this year, they sent out a warning about a cryptocurrency scam that used three main components: spoofing, a QR code, and a cryptocurrency ATM where the victim was instructed to transfer money.

They also revealed in their June 6 report that nearly half of all crypto-related scams originating from social media platforms in 2021, with as much as $1 billion in crypto lost to scammers over the course of the year.

Cointelegraph reached out to the FTC for comment, but did not receive a response by the time of publication.

Related: Saying ‘It’s Not Financial Advice’ Won’t Get You Out Of Jail — Crypto Lawyer

Globally, several financial watchdogs and enforcement agencies are also actively trying to curb false crypto advertising.

In March, the UK-based Advertising Standards Authority (ASA) issued A compulsory notice to over 50 companies advertising cryptocurrencies telling them to review their ads to ensure they comply with the rules.

In August, US-based consumer watchdog Truth in Advertising accused 19 celebrities of promoting non-fungible tokens (NFTs) without disclosing their affiliation with the project.

Australian financial regulators have issued a warning to the entire cryptocurrency industry about deceptive advertising tactics.

In October, the Australian Securities and Investments Commission (ASIC) launched a civil lawsuit against Australian company BPS Financial Pty Ltd (BPS) for alleged “misleading” representations regarding the Qoin token.