The US Federal Trade Commission has established a Working Group focused on blockchain, ostensibly to shut down fraudulent schemes that fall foul of the agency’s consumer protection and competition policing obligations. The FTC published its activities in a blog on the agency’s website on March 16, 2018. The initiative follows an FTC lawsuit brought against four people who were found to have used Bitcoin in at least one if not more illegal chain referral schemes.
Regulators finally starting to actively weed out dubious players
The FTC Working Group has “at least” three primary goals, according to Neil Chilson, the FTC Acting Chief Technologist.
Firstly, developing “FTC staff expertise in cryptocurrency and blockchain technology through resource sharing and by hosting outside experts.” Secondly, advancing heightened assistance in “internal communication and external coordination on enforcement actions.” And lastly, the group will generate a forum for discussing possible emerging influences on the FTC’s mandate and objectives and how the agency will respond to them.
“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,” Chilson wrote.
He also said that the FTC’s Blockchain Working Group aims to bring diverse expertise and practices together on a single platform. Working from this platform, the FTC would be better able to counter fraud in blockchain and other related fields, most notably the cryptocurrency arena.
“I expect that fraudsters will repurpose old schemes,” Chilson continued, “[in order] to capitalize on the current glamour and mystery of cryptocurrency.”
The FTC is no stranger to blockchain and cryptocurrency-related affairs’ disruptive demands. Circa June 2015, the FTC brought a cryptocurrency-related lawsuit against an app developer who had hijacked consumers’ phones and turned them to his virtual currency mining activities.
The following year, 2016, the agency brought another case against Butterfly Labs, a Bitcoin mining outfit, for misrepresenting the unused status, availability and ultimately profitability of mining rigs. In March 2017, the FTC also hosted a public forum around blockchain technology.
Although regulators are scrambling to address the shenanigans of dark players in the fraternity, the real impact of blockchain technology, now that it has established itself, is slowly being recognized for its massive import by governments and businesses alike across the globe.
Earlier in March 2018, the Coca-Cola Company and the U.S. State Department joined with three other companies in announcing the launch of a blockchain-based social responsibility project aimed at fighting forced labor.
In the island nation of Puerto Rico, where sentiment towards digital currencies tends more towards the amiable and positive south rather than the skepticism of many in the northern USA, the Department of Economic Development and Commerce (DDEC) has plans to form an advisory consultancy in order to promote the benefits of blockchain to businesses.
Featured image by Chris Allen