European Banking Authority blasts out warning on bitcoins
December 13, 2013, 5:35 AM
blogs.marketwatch.com
More alarm bells are ringing across Europe over bitcoins.
The European Banking Authority warned Friday of “risks deriving from buying, holding, or trading virtual currencies such as bitcoins,” which adds to last week’s warnings from French and Dutch banking authorities as well as the Chinese. Wagging a finger, the EBA says consumers are not protected through regulation when using virtual currencies and could be at risk of losing their money.
The EBA said there is “no guarantee that currency values remain stable,” and that it intends to a deeper look into bitcoin and the like “in order to identify whether virtual currencies can and should be regulated and supervised.”
The agency said European consumers need to understand that there is currently no regulatory protection in the European Union that would protect consumers from financial losses due to the failure of a platform for virtual currencies.
Just this week, Swedish bitcoin exchange Safello launched what it claims is the first bitcoin ATM in Europe, allowing users to change cash for bitcoins. Coindesk spoke to the CEO and co-founder of Safello, Frank Schuil, who said the financial authority in Sweden does see bitcoin as a “high-risk event,” and users of the machine will have to go through extra security steps.
The EBA warned as well about “digital wallets” storing bitcoins on computers, smartphones, etc., again reminding that there’s no legal protection in case of fraud. Last month, a Denmark-based bitcoin payment processor with a free online wallet service lost over $1 million worth of bitcoins after a security attack on its servers. China has so far produced the biggest known bitcoin swindle, in which a Chinese platform gathered up $4.1 million in bitcoins before disappearing.
Thursday evening, Kenny MacDermid, research analyst with Arbor Networks (h/t PCWorld) warned on a blog of a “Bitcoin Alarm” app that was basically malware. An encrypted file inside the app is a remote-controlled Trojan that can be used to steal login credentials and bitcoins, he wrote.
Europe and China officials differ from the U.S., where a blessing by some officials of the virtual currency sent prices surging mid-November. Former Fed Chairman Alan Greenspan isn’t among the fans, though, calling it a “bubble” earlier this month.
High atop Mt. Gox on Friday, bitcoin was changing hands around $960.
http://blogs.marketwatch.com/thetell/2013/12/13/european-banking-authority-blasts-out-warning-on-bitcoins/
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