The U.S. Securities and Exchange Commission is leery of bitcoin. The agency issued a lengthy warning to investors on Wednesday about risks it sees in bitcoin and virtual currencies, much of which has been already iterated by bitcoin advocates or other regulators. But the SEC, which is the top regulator for U.S. securities markets, also took a dig at bitcoin’s short existence as another negative.
The warning reflects regulatory agencies’ growing concern about the dangers of the new and virtually unregulated market. The U.S. Securities and Exchange Commission (SEC) issued an alert to investors Wednesday warning about the risks of trading Bitcoins and other virtual currencies. The SEC said that investors might be lured by the potential investments in something “novel, new and cutting-edge” but that Bitcoin represents a significant risk. “A new product, technology, or innovation – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities,” the SEC said. New technologies make Bitcoin ripe for fraudulent schemes, and the victims of theft may have limited options for recovering lost currency. In addition, Bitcoins are not insured and transfers of the currency are difficult to trace.