The U.S. Federal Trade Commission (FTC) has created a Blockchain Working Group to examine the ways in which the technology, particularly cryptocurrencies, will affect its objectives.
“We believe this working group is an important step to ensure the FTC can continue its missions to protect consumers and promote competition in light of cryptocurrency and blockchain developments,” Neil Chilson, the agency’s acting chief technologist, wrote in a blog post Friday.
The group will aim to “build on FTC staff expertise in cryptocurrency and blockchain technology through resource sharing and by hosting outside experts.” It will also strive to improve coordination and communication of enforcement actions both within the agency and externally.
The creation of the group coincided with an FTC announcement that it is pursuing a lawsuit against four individuals associated with Bitcoin Funding Team and related operations My7Network and Jetcoin, who allegedly used bitcoin in fraudulent “chain referral schemes” – the first case of its kind for the agency.
“It is no surprise that fraudsters might use cryptocurrencies in their scams,” Chilson wrote of the case in Friday’s blog post, continuing:
“As the primary federal general consumer protection agency, the FTC has seen this pattern before. Fraudsters often attempt to capitalize on the excitement and confusion around hot new technologies, and they are quick to dress up old schemes in the clothes of the latest and greatest innovations.”
The FTC has been involved the crypto industry since 2015, when it filed its first cryptocurrency-related case over an app containing mining malware. It has since prosecuted at least one other crypto-related lawsuit, and held a public forum on blockchain technology in 2017.
In February, the commission published a blog post that outlined the risks associated with cryptocurrency investments for consumers.
The FTC is not the first government agency to form a blockchain working group. The State Department announced a similar initiative in January of 2017. Additionally, the Financial Stability Oversight Council, which assesses risks to the financial system, announced that it formed a cryptocurrency-focused working group in January of this year.
FTC image via Shutterstock