Bitcoin gets EU watchdog’s thumbs down

Published on 13 December 2013 at 12:52

The European Banking Authority watchdog is issuing a warning to investors over the risks of violent exchange rate fluctuations and cyber security for people using virtual currencies such as Bitcoin, reports the Financial Times.

The warning is only the second such notice issued by the London-based authority and comes as central banks struggle to manage the rapid uptake in the little-regulated cyber currencies. The worth of the currencies can vary wildly. For example, the value of one Bitcoin swung between $340 and $1,240 during last week. The FT continues –

While investors have enthusiastically adopted virtual currencies, authorities are worried the phenomenon is also fostering increased criminality focused on hacking online platforms and accounts, bribery, money laundering, or the purchase of illicit drugs or weapons. The EU’s supervisors said they wanted to highlight “possible risks” associated with the purchase, holding or trading of virtual currencies. Among them are the danger that a consumer’s digital wallet on their computer or smartphone is hacked, the watchdog said.

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