For the past several months, we’ve seen no lack of governments around the world issue warnings related to bitcoin and other digital currency. The movement is seemingly spreading to individual U.S. states.
The State of Hawaii independently released their own bitcoin-related warning, noting that any organization transmitting bitcoin without proper money-transmitting licensing was doing so unlawfully.
Here in Massachusetts, the State’s Office of Consumer Affairs and Business Regulation said they will be releasing a consumer advisory on bitcoin, too. The information comes from Undersecretary Barbara Anthony, who said “We are going to be issuing an advisory indicating the disadvantages and advantages that accompany bitcoin,” in a phone interview with MarketWatch. “We need to impress upon consumers that you do take risk here.”
The office plans to touch on the digital currency’s volatility, lack of consumer rights (legally speaking) available when using bitcoin (as opposed to a credit card, for example), and the absence of insurance if bitcoins are stolen or lost due to bankruptcy (see FDIC).
The State of Massachusetts isn’t looking to threaten anyone who wishes to use bitcoin, however.
“If you’re willing to take the risk, then right now, there’s nothing that prohibits that,” Undersecretary Anthony said. “But my concern is that [your average] consumers aren’t really paying attention to the disadvantages that are associated.”
The news comes in the midst of outrage concerning bitcoin exchange Mt. Gox, who filed for bankruptcy protection on Friday. It is speculated that all users of the exchange lost stored funds — an amount pegged at over 750,000 BTC, or over $400 million USD. [source: MarketWatch]