As the cryptocurrency market reeled from a brutal selloff in June 2018, two very different narratives were unfolding. While U.S. regulators were preparing to confront the growing epidemic of cryptocurrency fraud head-on, the technology community was looking ahead to a future where blockchains could communicate with one another — a vision that Bloomberg described as giving “hope to crypto diehards” even as prices cratered.
TL;DR
- The FTC announced a half-day workshop “Decrypting Cryptocurrency Scams” scheduled for June 25, 2018, at DePaul University in Chicago
- The event brings together federal and state law enforcers, consumer advocates, and industry members
- Bloomberg reported on growing interest in blockchain interoperability — blockchains “talking to each other”
- Bitcoin traded at $6,582 on June 12, down 13.6% over the previous seven days
- EOS launched its mainnet amid the market downturn, while Ethereum Classic gained 14.9% in 24 hours
FTC Takes on Crypto Fraud
On June 12, 2018, the U.S. Federal Trade Commission formally announced the agenda for its “Decrypting Cryptocurrency Scams” workshop, a half-day event scheduled for June 25, 2018, at DePaul University in Chicago. The announcement came at a critical moment — the cryptocurrency market had just lost over $40 billion in value following the Coinrail exchange hack, and investor confidence was at its lowest point since the start of the year.
FTC Bureau of Consumer Protection Director Andrew Smith was slated to open the event with keynote remarks at 1:00 PM Central Time. The workshop was organized into three distinct panels, each tackling a different dimension of the cryptocurrency fraud problem.
The first panel was designed to survey the short but already eventful history of cryptocurrencies — from Bitcoin’s creation through the explosion of initial coin offerings (ICOs) — and examine how consumers were actually using digital assets. The key question: were people treating cryptocurrencies as payments, investments, or something else entirely?
The second panel focused on mapping the scam landscape itself. Law enforcers and consumer advocates planned to discuss how con artists were operating in the marketplace, the challenges in detecting illegal practices, and whether there were tell-tale signs that could tip consumers off to possible fraud before they lost money.
The third and final panel addressed effective approaches to combating cryptocurrency scams. Topics included how law enforcement agencies were responding so far, whether consumers knew how to report fraud, and how government could enforce the law effectively while still encouraging pro-consumer innovation. Consumer education about risks was also on the agenda.
Why Regulators Were Alarmed
The FTC’s decision to hold a dedicated workshop reflected growing alarm within U.S. government agencies about the scale of cryptocurrency-related fraud. The timing was significant — the event was announced the same week that the Coinrail hack demonstrated just how vulnerable the crypto ecosystem remained to criminal exploitation.
At the state level, regulators were also stepping up enforcement. The North American Securities Administrators Association had launched “Operation Cryptosweep” in May 2018, a coordinated crackdown involving 40 Canadian and U.S. state and provincial securities regulators targeting fraudulent ICOs and crypto investment schemes.
The FTC workshop was free and open to the public, with no pre-registration required, and was also available via webcast — signaling the agency’s desire for broad public engagement with the issue. The event was approved for 2.75 Illinois MCLE general credit hours, extending its reach into the legal community as well.
Blockchain Interoperability: The Long-Term Vision
While regulators focused on protecting consumers from fraud, the technology side of the crypto world was advancing rapidly. On June 12, 2018, Bloomberg published a feature exploring the emerging concept of blockchain interoperability — the ability for separate blockchains to communicate and transact with one another directly.
The article highlighted projects working on cross-chain communication protocols that would eventually allow assets and data to flow between previously isolated blockchain networks. This was a foundational challenge: at the time, each blockchain operated as its own silo, with users typically needing centralized exchanges to move value between networks.
The concept of “blockchains talking to each other” was particularly relevant given the market conditions. With Bitcoin at $6,582 and Ethereum at $496.84, the speculative froth of late 2017 had clearly dissipated. What remained were the builders — developers and researchers working on the infrastructure that would eventually support cross-chain bridges, atomic swaps, and the interconnected blockchain ecosystem that would emerge in subsequent years.
Market Context: A Divergent Landscape
The CoinMarketCap snapshot from June 12, 2018, revealed a market under significant stress. Bitcoin was down 13.6% over seven days. Ethereum had fallen 18.3% in the same period. EOS, which had just launched its much-anticipated mainnet after raising a record-breaking $4 billion in its year-long ICO, was down a staggering 27.5% over the week.
Yet amid the carnage, Ethereum Classic stood out as a notable outlier, gaining 14.9% in 24 hours. The original Ethereum chain — which continued operating after the 2016 DAO hack fork — was experiencing renewed interest, partly driven by speculation that it might avoid the regulatory scrutiny that the broader market was facing.
Bitcoin Cash had shed 23.6% over seven days to trade at $874.43, while Litecoin was down nearly 17% at $100.75. The total cryptocurrency market capitalization hovered around $250 billion — a fraction of the nearly $800 billion peak reached just six months earlier in December 2017.
The EOS Mainnet Launch
Adding to the week’s significance, EOS was in the process of launching its mainnet — a complex, multi-day process that required block producers to be elected and the network to be gradually activated. The launch of the EOS.io blockchain represented one of the most ambitious technical undertakings in the crypto space at the time, built by Block.one using the open-source blockchain framework that had been published earlier in June 2018.
The EOS mainnet launch was proceeding despite the market downturn, demonstrating that not all activity in the crypto space was driven by price speculation. Technical milestones and infrastructure development continued regardless of market conditions — a pattern that would repeat throughout subsequent market cycles.
Why This Matters
June 12, 2018, represented a fascinating inflection point in cryptocurrency history. The FTC was preparing to tackle consumer fraud in the space — a recognition that crypto had grown large enough to warrant serious regulatory attention. Meanwhile, the concept of blockchain interoperability that Bloomberg highlighted would eventually give rise to Polkadot, Cosmos, and an entire ecosystem of cross-chain protocols that are now fundamental to decentralized finance. The fact that these developments were happening while the market was down 60% from its highs underscores a key pattern in crypto: the most important infrastructure gets built during bear markets, not bull runs.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.