The Federal Trade Commission's guidance on cryptocurrency and scams is a plain-language explainer, not a rulebook or enforcement action. It was published on February 10, 2025. For anyone reading crypto announcements, its value is narrower and more useful than a general caution: it fixes several hard structural facts a careful reader can check press releases and product claims against. It says nothing about specific coins' prices, specific firms, or recovery services.
The single most decision-relevant point is that cryptocurrency generally exists only electronically, per the FTC, and that funds held this way lack the backstops people assume around bank deposits. Below is how to read that guidance as evidence rather than as a scare page.
The confirmed structural facts
The FTC states that cryptocurrency is a type of digital currency that generally exists only electronically. It identifies Bitcoin and Ether as well-known cryptocurrencies while noting many different cryptocurrencies exist and new ones keep being created. That framing matters for due diligence: the category is open-ended, so the existence of a token is not evidence of legitimacy or maturity.
On access, the guidance says people usually buy cryptocurrency using a phone, a computer, or a cryptocurrency ATM, and can also buy through an exchange, an app, or a website. Some earn it through mining, a complex process the FTC describes as requiring advanced computer equipment to solve highly complicated math puzzles. Storage happens in a digital wallet, which can be online, on a computer, or on an external hard drive, and each wallet has a wallet address usually expressed as a long string of numbers and letters.
Those four storage and access points are the ones a reader should locate in any product statement: where funds sit, who controls the credential, and what happens if the counterparty fails.
Why the loss mechanism matters more than the labels
The FTC lists specific failure modes. If something happens to a wallet or to cryptocurrency funds — an online exchange platform going out of business, sending cryptocurrency to the wrong person, losing the wallet password, or a wallet being stolen or compromised — the guidance says you are likely to find that no one can step in to help recover the funds.
It extends that to accounts: crypto accounts are not backed by a government, crypto held in accounts is not insured by a government the way U.S. dollars deposited into an FDIC insured bank account are, and if the storage provider goes out of business or is hacked, the government has no obligation to step in and help get the money back. Read together, these are statements about reversibility and recourse, not about volatility or fraud rates.
For a press-release reader, that reframes a common phrase. A claim that a platform is "secure" or "protected" does not, under this guidance, imply government backing or deposit insurance. The announcement would need to specify a mechanism; the FTC text does not supply one.
Value stability is stated, not quantified
The guidance says cryptocurrency values change constantly, can change rapidly, even by the hour, and that the amount of change can be significant. It gives no magnitude, no time series, and no example. A reader cannot convert that into a volatility figure, and should not treat a press release's calm characterization as contradicting it. The FTC text also does not explain why prices move; it simply flags that they do.
This is where announcement reading splits from market commentary. The guidance supports the expectation of movement. It supports nothing about direction, size, or timing. Any number a project cites about its own price behavior is that project's claim, not something this source corroborates.
Verification steps for an announcement
Using the FTC points as a checklist of what to look for, not as proof of anything about a specific firm:
- Locate the storage: does the announcement say whether wallet keys are held online, on a device, or on external hardware, matching the FTC's three described locations?
- Locate the counterparty: if funds sit with an exchange or app, does the text acknowledge what happens if that platform goes out of business, which the FTC names as a loss scenario?
- Check the recourse language: does the claim of protection specify a mechanism, given that the FTC says crypto accounts are not government-backed or government-insured the way FDIC insured bank deposits are?
- Test the reversibility claim: the FTC says recovery is unlikely if you send to the wrong person or lose a password. Any promise of easy reversal is a claim to scrutinize, not assume.
- Separate education from endorsement: this is consumer guidance dated February 10, 2025. It names no company and approves no product.
A worked example of how to hold the line: if an announcement says a product reduces the risk of losing wallet access, that is a product claim. The FTC observation that losing a wallet password can leave funds unrecoverable is a background condition, not a rebuttal. The reader's job is to ask whether the announced mechanism addresses that condition and who bears the loss if it fails. Hypothetical scenario: a reader comparing two custody options can ask both providers the same four questions above and compare the specificity of the answers, without assuming either is safe.
What the source does not say
The guidance does not quantify losses, name any scam type, list red flags of fraud, or describe reporting channels in the supplied text. It does not say any cryptocurrency is legitimate or illegitimate. It does not state a price, a return, or a volatility figure, and it does not compare specific exchanges or wallets. It also does not address tax treatment, regulation by any specific agency, or the legality of any token. Nothing in it should be read as an assessment of a particular company's solvency or conduct.
Treat the guidance as a fixed baseline about electronic-only existence, wallet storage, and absent government backstops. Everything beyond that — firm-specific safety, recovery services, price behavior — remains a claim to be evidenced elsewhere.