Consumers should be wary of retirement cryptocurrency accounts that claim to be approved by the Internal Revenue Service, warned the Commodity Futures Trading Commission (CFTC).
In a new circular dated February 2, the CFTC calls people to "be careful" regarding such releases, especially those who claim that the United States tax authority has somehow reviewed or approved the product. The IRS, the CFTC noted, "does not approve or review investments for IRA."
The agency went on to write:
"Taxpayers tend to focus on retirement savings plus taxes to increase deductions or maximize savings. As a result, some companies may try to entice customers to buy highly volatile cryptocurrencies by using false claims or painting virtual currencies as less risky because it can be used to save for retirement. "
Individual retirement accounts that involve cryptocurrencies are not exactly new. But the CFTC circular indicates that some proposals recently made to US taxpayers do not reveal all the relevant risks, or are completely fraudulent.
"Custodians and trustees of self-directed IRA accounts may have limited duties for investors and generally will not evaluate the quality or legitimacy of an investment or its promoters," the agency said in its statement.
The CFTC has taken an increasingly active role in regulating activities related to cryptocurrencies, including a recent move to strengthen its analysis of proposed financial products, including future ones.
The president of the agency, J. Christopher Giancarlo, will appear before the Banking Committee of the Senate on February 6 to analyze the supervision of the market by the CFTC.
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