Commodity Futures Trading Commission (CFTC)
The Commodity Futures Trading Commission (CFTC) noted the risks
of crypto with having the following:
Operational risks, with having many different platforms,
are not subject to supervision that otherwise applies to regulated
platforms. These exchanges may be missing critical safeguards and lose client data.
Cybersecurity risks—some platforms may commingle client assets which may affect whether or how one can withdraw the currency; and some may be vulnerable to hacks resulting in theft of virtual currency. Speculative risks—virtual currency is subject to substantial volatility and price swings often due to inadequate trading volume.
Fraud and manipulation risk—depending on the platforms, they may be vulnerable to hacks resulting in theft of client funds and loss of assets, Ponzi schemes, and fraudulent “bucket shop” schemes.
Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) has also posted consumer advisories noting risks as stated above by the CFTC and adding their own evaluation on the problems associated with bitcoins. Among the added risks were: (1) persons alleging they were exchange representatives to whose accounts moneys were transferred to purchase bitcoins but the exchanges never took place and (2) Bitcoin kiosks that are connected to the Internet to permit the exchange of cash for bitcoins appear to be ATMs but do not function as traditional ATMs in that they are not connected to a bank, lack the safeguards of bank ATMs, often charge large transaction fees as high as 7 percent.
Government Services Administration (GSA)
The GSA is exploring the use of DLTs like blockchain for financial management, procurement, IT asset and supply
chain management. The program launched the U.S. Federal Blockchain platform for federal agencies and U.S. businesses interested in exploring DLT and its implementation within government. It hosted the first U.S. Federal Blockchain Forum on July 18, 2017, uniting more than 100 federal managers from dozens of unique agencies to discuss use cases, limitations, and solutions.