Thursday, August 14, 2014
The Consumer Financial Protection Bureau (CFPB) is now warning consumers of the risks of using virtual currency. "The Bureau's Consumer Advisory notes that there are certain "associated risks" of using virtual currency – including hackers, costs, and scams – and that there are "fewer protections" associated with this type of currency than what "you expect from a bank or debit or credit card provider."
In a Consumer Advisory issued on Tuesday, the CFPB, warned consumers of the risks of hackers, scams, and the lower level of built in protection when using virtual currency. "The Bureau advises consumers to obtain information about the dealers from which they purchase virtual currency, and to ascertain whether a virtual currency exchange is registered with the Financial Crimes Enforcement Network (FinCEN), as required by law. The Bureau's Consumer Advisory explains that virtual currency is subject to price fluctuation and is neither insured by the government, nor protected from data breaches by any bank or credit card company."
Here is the NY Times article.
Here is a Venable whitepaper.