The CFTC warned customers about virtual currency pump-and-dump schemes conducted in unregulated online cash markets.

According to the "Virtual Currency Customer Protection Advisory," pump-and-dumps are mostly anonymous and are organized in public chat rooms or over mobile messaging apps. They target victims who accept tips or rumors over social media regarding virtual currency or tokens and do not conduct independent research prior to purchasing. The CTFC has limited regulatory oversight in commodity cash markets and so advised the public to be cautious when using these sites. They offered the following advice to investors:

  • Don't purchase digital coins or tokens because of a single tip, especially if it comes over social media.
  • Don't believe ads or websites that promise quick wealth by investing in certain digital coins or tokens.
  • Do not participate in pump-and-dump trades.
  • There is no such thing as a guaranteed investment or trading strategy. If someone tells you there is no risk of losing money, do not invest.

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