Financial Regulators Increasingly Skeptical of Bitcoin
Two financial regulatory bodies have issued new Bitcoin-related warnings and sanctions this week.
The first came from FINRA, the financial industry’s self-regulatory organization. It published an investor’s note on Tuesday saying that “selling and using bitcoins carry numerous risks.” The second warning came Monday from a Texas state financial regulator. That document is an emergency cease-and-desist order against Balanced Energy, an energy firm taking investment in bitcoins.
FINRA’s warning declared:
Digital currency such as Bitcoin is not legal tender. No law requires companies or individuals to accept bitcoins as a form of payment. Instead, Bitcoin use is limited to businesses and individuals that are willing to accept bitcoins. If no one accepts bitcoins, bitcoins will become worthless.
Platforms that buy and sell bitcoins can be hacked, and some have failed. In addition, like the platforms themselves, digital wallets can be hacked. As a result, consumers can—and have—lost money.
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