The Commodity Futures Trading Commission (CFTC) is warning investors about the dangers of cryptocurrencies.
It issued its fourth customer advisory on Monday, urging caution when buying digital coins or tokens and viewing “any promises or guarantees of future value as a ‘red flag.’ … There is no such thing as a guaranteed investment or trading strategy … The market for digital coins is still very young and there is no widely accepted standard to assigning a value on a particular virtual coin or token.”
In addition, many initial coin offerings (ICOs) have been identified as frauds, according to the CFTC.
It recommends that individuals considering the purchase of a digital coin or token consider “extensive due diligence on any individuals and entities listed as affiliates of the coin or token offering.” If potential investors can’t easily find that information, that, too, can be a red flag, the CFTC warns..