On Friday, the Federal Trade Commission (FTC) established a blockchain working group, which will facilitate external coordination on enforcement actions among other responsibilities.
On March 16, 2018, the Federal Trade Commission (FTC) announced the creation of an internal blockchain working group through a blog post by acting chief technologist Neil Chilson. The group’s goals include the following:
- Build on FTC staff expertise in cryptocurrency and blockchain technology through resource sharing and by hosting outside experts.
- Facilitate internal communication and external coordination on enforcement actions and other related projects.
- Serve as an internal forum for brainstorming potential impacts on the FTC’s dual missions and how to address those impacts.
Chilson did not immediately respond to a request for comment.
“I expect that fraudsters will repurpose old schemes to capitalize on the current glamour and mystery of cryptocurrency,” he wrote on Friday. “The FTC staff will diligently apply its expertise to identify such schemes.”
Anticipating that cryptocurrencies and related technologies could impact the FTC’s consumer protection and competition missions, Chilson listed five issue areas:
- Payments made in cryptocurrency (e.g., ransomware)
- New fraudulent schemes using blockchain technology or cryptocurrency
- Digital asset forfeiture (defendants may try to hide assets using cryptocurrency)
- Marketplace competition
- Potential advantages afforded by consumer control over personal information
The FTC’s blockchain working group parallels similar moves by the Securities and Exchange Commission (SEC), which previously established a distributed ledger technology (DLT) working group, and by the Commodity Futures Trading Commission (CFTC), which created subcommittees on DLT and virtual currencies in February 2018.
Note: According to Pillsbury Winthrop Shaw Pittman LLP, the SEC’s DLT working group was previously called the Digital Currency Working Group, and it was originally established in 2013. In September 2017, the SEC additionally created a Cyber Unit.
Last week, ETHNews reported that a federal court upheld the FTC’s request for a temporary restraining order against four individuals who allegedly ran a fraudulent cryptocurrency scheme.
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