European Union Warns on Bitcoin

european-union13 Dec 2013 / NYT – LONDON – The European Union on Friday added to a string of recent warnings about the safety of using and investing in Bitcoin, the virtual currency that is not issued by any government.

The union’s banking authority said consumers needed to be aware that they were not protected through regulation when paying with Bitcoins. The digital currency is vulnerable to hackers, might lose its value and any misuse could prompt law enforcement agencies to close Bitcoin exchange platforms and keep consumers from accessing their investment, the European regulator said.

“Currently, no specific protection exists in the E.U. that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business,” the European Banking Authority said, adding that it was looking into whether such currencies could and should be regulated.

The warning comes after China last week restricted its banks from using Bitcoin as currency because of concerns about money laundering and a threat to financial stability. Germany said earlier this year that it would not recognize Bitcoin as a foreign currency and that gains from buying and selling Bitcoins would be taxable. Norway has been considering a similar stance…… Read more

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