Wilmington – Attorney General Beau Biden’s Investor Protection Unit today issued an investor advisory cautioning investors to consider the risks associated with Bitcoin and other virtual currencies. Read the advisory online.
“Investing and trading in virtual currencies carries substantial risks,” Biden said. “Unlike traditional currency, these alternatives are not issued by a governmental authority or backed by governmental guarantees and are subject to little or no oversight.”
Virtual currencies, which include digital and crypto-currencies, are gaining in both popularity and controversy. Virtual currencies are electronic mediums of exchange that are bought or sold through virtual currency exchanges and can be used to purchase goods or services where accepted. Growing numbers of merchants, businesses and other organizations currently accept Bitcoin, a popular virtual currency, in lieu of traditional currency. Recently, one of the largest Bitcoin exchanges, MtGox, shut down after claiming to be the victim of hackers and losing more than $350 million of virtual currency. Despite the controversy, proponents of virtual currencies continue to purchase and hold virtual currencies, often to their detriment.
The Investor Protection Unit’s advisory alerts Delawareans to the risks associated with investing in any financial offering containing virtual currency. They include:
For more information about the risks associated with virtual currency, call the Attorney General’s Investor Protection Hotline at (302) 577-8424 or e-mail email@example.com.
The Attorney General’s Office, through its Investor Protection Unit, enforces the Delaware Securities Act, which governs the sale of investment products and the activities of investment professionals in Delaware. The Unit investigates and prosecutes securities fraud and licensing violations by investment brokers and advisers. Visit the Unit’s webpage at http://www.attorneygeneral.delaware.gov/fraud/ipu to review a variety of investor education resources, a searchable broker/dealer registration database, and information about filing an investor complaint.
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