A pair of regulatory associations Wednesday published model guidance for regulators to use in advising consumers about the risks of using virtual currencies, such as Bitcoin.
The North American Securities Administrators Association (NASAA) and the U.S. Conference of State Bank Supervisors (CSBS) released model guidance for consumers and investors, which is designed to help local regulatory agencies educate the public about transacting with, or investing in, virtual currencies.
The model guidance explains what virtual currency is, provides a list of risks consumers should consider when investing, and reminds consumers to research what sort of regulation, if any, would apply to virtual currency transactions or investments.
“The increased interest in virtual currency and other payments innovations has led to the rapid emergence of different types of currencies and payments mechanisms. As these are released into the marketplace, it is important for consumers and investors to educate themselves with accurate information to make informed decisions about this innovative and evolving industry,” the guidance notes.
It also advises that virtual currencies, and companies dealing in virtual currencies, may not be regulated; that cryptocurrencies can be stolen or otherwise vulnerable to cybercrime, and that they have been connected to criminal activities; that their values can be volatile; and, that virtual currency transactions may be taxable.