Consumer protection Market watchdogs are investigating consumer complaints about cryptocurrencies

Currently, the market watchdogs at the Consumer Association Hessen are investigating consumer complaints regarding roughly 20 different providers and six cryptocurrencies. It shows that consumers increasingly complain about providers that advertise the business in Bitcoins and other crypto currencies with dubious investments.

The study shows the following aspects:

  • Cryptocurrency providers advertise on Facebook, in messenger services or contact consumers without permission by e-mail. The ads claim that high returns can be achieved by investing in new and allegedly future-orientated cryptocurrencies.

  • Such offers are often obscure, the business models behind them are incomprehensible and further information is only obtained after contacting the providers or registering on the advertising websites. Moreover, there is hardly ever an imprint on the website or the providers are based abroad.

  • It seems that the forbidden snowball systems are at the core of such offers. Consumers act as "agents" and are to acquire new members in order to receive commissions for it.

Wolf Brandes, Head of the Watchdog Team Finance at the Consumer Association Hesse, said: "Here, cryptocurrencies are not the problem, but unfair business in the respective environment. (...) Bitcoin & Co. are not legal tender but rather substitute currencies. It is hardly possible to make a reliable statement about their acceptance and consistency."

Source: Consumer Association Hesse

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