bitcoinvancouver

The GoTo Site for all things Bitcoin in Beautiful Vancouver British Columbia Canada

Virtual currency raises red flags

Virtual currency raises red flags

By  Neil Stempleman 

REUTERS Sunday October 20, 2013 7:28 AM

 
 
 

Consumers could be headed for trouble when they turn over bank and brokerage pass codes to investment advisers or get pulled into investment scams involving digital currencies, state securities regulators said.

The North American Securities Administrators Association recently added the two technology-related issues to its annual list of top investor threats.

The regulators’ organization said digital currencies, such as Bitcoin, offer consumers another way of paying for goods and services, but they also provide “fertile ground for scam artists to capitalize on …(their) increasing popularity and acceptance.”

The regulators said that digital currencies are highly volatile and the concept is difficult for even the sophisticated investor to understand.

Bob Webster, director of communication for the association, said the warning was not about using Bitcoins or other virtual currencies, but about con artists using Bitcoin as a cover or investment lure.

Putting virtual currencies on the association’s list will “raise some flags (and) put this on investors’ watch,” he said. “Investors should try to learn and understand more about Bitcoin.”

Bitcoin’s website notes the volatility of the currency and risks from trying to get rich from using the new currency. The website also says, “Bitcoin has no official organization, individuals with authority, nor spokespeople.”

A co-founder of BitPay, a company that specializes in processing Bitcoin payments, agreed with the association’s assessment of the danger from virtual currencies. Stephen Pair, who is also BitPay’s chief technology officer, said in an email: “For anyone that does not understand decentralized, cryptographic currencies like Bitcoin, it is not a good idea to invest in them.

“Aside from the fact that they are very new with a short track record, safely storing large amounts of them requires skill and experience in computer security,” he said. “The NASAA is correct in stating that scam artists are attempting to capitalize on the rising popularity of Bitcoin.”

Email
Advertisements

Questions, Comments, complaints or observations? Your input is important to us.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Information

This entry was posted on October 21, 2013 by and tagged .

Follow me on Twitter

bitcoinvancouver2013@gmail.com

bitcoinvancouver2013@gmail.com

Blog Stats

  • 9,845 hits

Follow me on Twitter

%d bloggers like this: