Pennsylvania is joining increasing number of U.S. states issuing warnings on digital currencies.
The Pennsylvania Department of Banking and Securities today released an announcement urging consumers, businesses, and investors to consider the risks of getting involved with digital currencies — namely bitcoin and litecoin.
“These virtual currencies – unlike U.S. dollars – are not backed by tangible assets or the full faith and credit of the U.S. government, and currently are subject to little or no regulation in any country,” said Glenn Moyer, Secretary of Banking and Securities. “In addition, we have seen that the value of virtual currencies is highly volatile and the very concepts underlying these currencies are still being debated by financial and legal experts.”
The Department asks the public to make consideration of the following:
- The Internal Revenue Service has declared that bitcoins and other digital currencies shall be declared as property for federal income tax purposes.
- Virtual currency holdings can be stolen “or otherwise subject to cybercrime”.
- Virtual currency holdings are not insured by the FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration).
The advisory is being issued in conjunction with the Conference of State Bank Supervisors and the North American Securities Administrators Association.
While members in the crypto-currency community may disagree with the points made by the Department, you can’t argue with the fact that this is their job.
Other states that have released similar warnings include Massachusetts, Nevada and Hawaii.
What do you think? Do you consider consumer alerts released by state government agencies to be appropriate or just a bit too much?