U.s. Government agencies warn consumers of the risks of bitcoin

U.s. Government agencies warn consumers of the risks of bitcoin

United States financial agency on Tuesday warned consumers that use currency online bitcoin is filled with risks such as theft and hacking and fraud.

The Financial Industry Regulatory Authority (FINRA) issued a public warning following a spate of scandals involving such currencies.

"Buying and using digital currencies such as bitcoin brings risks. Speculative trading in the bitcoin carries significant risk, "said FINRA AFP was quoted as saying.

"The buying and selling of Platform bitcoin can be compromised. In addition digital wallets can be compromised. As a result, consumers can and have lost money. "

FINRA, the body which regulates the securities industry, says that the digital wallet, where users put their bitcoin on computer files, vulnerable to theft and has no legal protection and guarantees as the depositors in banks and credit unions.

Bitcoin transactions--designed for transferring funds between two parties without a bank or other intermediary--is also vulnerable to fraud and robbery, as well as irreversible, FINRA added.

FINRA also pointed to the use of bitcoin payments in money laundering and drugs.

The Agency said that the exchanges involved in such activity can be closed.

FINRA noted the closure of Mt Gox based in Japan, after it was claimed to be the largest bitcoin exchanges was robbed of almost half a billion dollars in the form of digital currency is money that most of its customers.

Mt Gox filed bankruptcy protection in Japan at the beginning of this month and in the United States on Monday (10/3).