Beware of various kinds of troubles related to cryptocurrencies
There has been an increase in the number of troubles related to cryptocurrencies, which are electronically traded via the Internet. PIO-NET1 shows that cryptocurrency-related inquiries amounted to 2,666 in FY2017, about three times as many as those in FY2016.
NCAC alerted consumers to cryptocurrency-related troubles twice in the past. Even after that, inquiries about questionable investment schemes related to cryptocurrencies remained high in number (e.g. "My acquaintance told me that investment in cryptocurrency would be profitable and I invested in it, but things didn't go well"). In addition, there have been some inquiries about investments to ICO and mining, and those about helpdesk service by virtual currency exchange service providers.
In case of transactions related to cryptocurrencies, consumers need to bear in mind that there may be fraudulent investment schemes capitalizing on the topicality of cryptocurrencies and that transactions via a virtual currency exchange service provider involve a high risk of price fluctuation and system risks such as unauthorized access. Therefore, NCAC encourages consumers to understand risks associated with cryptocurrency transactions and details of such transactions before entering into a contract related to cryptocurrencies, and requests business associations to enhance systems for responding to consumer inquiries.
Diagram: Number of inquiries related to cryptocurrencies
* Data registered through March 31, 2018. Inquiries referred to NCAC from local consumer affairs centers are not included.
Inquiries related to cryptocurrencies amounted to 186 in FY2014, 440 in FY2015, 847 in FY2016, and 2,666 in FY2017.
- 1 PIO-NET is a database that collects information on inquiries concerning consumer affairs by linking NCAC with local consumer affairs centers and similar organizations across Japan via an online network.
Sample cases of inquiries
Inquiries about questionable investment schemes
- Investment related to cryptocurrencies
- Investment in cryptocurrency mining
- Investment in ICO
- Theatrical solicitation for purchase of automated cryptocurrency trading system
Inquiries related to virtual currency exchange service providers
- Disappearance of cryptocurrency due to unauthorized access
- Deposit into other's wallet
- Transfer to a wrong recipient
- Helpdesk service by businesses
Problems identified based on the sample cases
- There are some fraudulent investment schemes capitalizing on the topicality of cryptocurrencies (Case 1-4)
- Insufficient responses of businesses to consumer inquiries (Case 5-8)
Advice for consumers
- If you feel uneasy about investment related to cryptocurrency, do not invest in it.
- Confirm if the company is registered as a virtual currency exchange service provider. Understand risks associated with transactions and take possible proactive measures.
- If you feel even slightly uneasy, consult your local consumer affairs center.
Requests to business associations
NCAC requests related business associations to further ensure the following so that consumers can use virtual currency exchange service without anxiety.
- Further inform security measures and system risks so that consumers can use virtual currency exchange service without anxiety.
- Reinforce and disseminate the system for helpdesk service (e.g. helpdesk service via user-friendly means of communication, proper management of complaint handling period).