U.S. Consumer Protection Agency Gives Warning about the Risks of Bitcoin -- Security Today

US Consumer Protection Agency Gives Warning about the Risks of Bitcoin

By Matt Holden
Aug 12, 2014

U.S. Consumer Protection Agency Gives Warning about the Risks of Bitcoin Bitcoin continues to come up against criticism from different governing bodies it seems, this time from the U.S. Consumer Financial Protection Bureau, (CFPB) who have released a consumer advisory regarding the online digital currency. The six-page memo discusses all virtual currency, and advises on how to buy them as well as layouts out the risks that come from hackers taking advantage of the hype surrounding the technology.

“Virtual currencies may have potential benefits, but consumers need to be cautious and they need to be asking the right questions,” said CFPB Director Richard Cordray, in the statement. “Virtual Currencies are not backed by any government or central bank, and at this point consumers are stepping into the Wild West when they engage in the market.”

The CFPB also noted that virtual currency can cost more to use than credit cards and cash, and when coupled with the risks associated with capable hackers, looks like a poor choice in currency.

Barry Silbert, founder of online asset-selling marketplace SecondMarket, had this to say in a response:

“I think it is fair to say that a number of the risks highlighted could also be applied to cash. Investing in bitcoin is indeed risky, but it is no more risky than using physical U.S. dollars.”

About the Author

Matt Holden is an Associate Content Editor for 1105 Media, Inc. He received his MFA and BA in journalism from Ball State University in Muncie, Indiana. He currently writes and edits for Occupational Health & Safety magazine, and Security Today.

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