Bitcoin investors told to watch out for hackers trying to steal their money by US Securities and Exchange Commission
'If you lose money, there is a substantial risk that our efforts will not result in a recovery of your investment', agency says
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Your support makes all the difference.People should be aware of the potential dangers of investing in bitcoin, the US Securities and Exchange Commission (SEC) has warned.
The agency urged anyone looking to get involved in the cryptocurrency to be alert to the threats posed by cyber criminals and fraudsters.
Bitcoin is not regulated by any state and transactions are irreversible, so once it has left an account, it irretrievable.
Along with state securities regulators the SEC said it was "pursuing violations". But it cautioned that, "if you lose money, there is a substantial risk that our efforts will not result in a recovery of your investment".
It also advised potential investors to “exercise caution” and encouraged people to read a newly issued release from the the North American Securities Administrators Association (NASAA).
The document highlights several key concerns around bitcoin and other digital currencies.
“Cryptocurrency is subject to minimal regulatory oversight, susceptible to cybersecurity breaches or hacks, and there may be no recourse should the cryptocurrency disappear,” it says. "The high volatility of cryptocurrency investments makes them unsuitable for most investors, especially those investing for long-term goals or retirement.”
NASAA said that there is no guarantee that cryptocurrencies will continue to increase in value, as they have been doing over recent months.
It also advised people to research investment opportunities thoroughly before parting with their money, even if they were keen or under pressure to “act fast”.
“Investors in cryptocurrency are highly reliant upon unregulated companies, including some that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions," the document states.
“Investors will have to rely upon the strength of their own computer security systems, as well as security systems provided by third parties, to protect purchased cryptocurrencies from theft.”
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