European warning on virtual currencies

Consumers have been warned of the possible risks from buying, trading or holding virtual currencies such as Bitcoins by a European financial regulator.

The European Banking Authority (EBA) has warned that some of the biggest risks facing consumers include:

  • money may be stolen from your ‘digital wallet’
  • the value of the virtual currency may change quickly reducing the value of your investment, and
  • losing your money if the exchange platform collapses

Virtual currencies are not regulated, so if something does go wrong you will not be able to claim compensation.

What does this mean for you?

The EBA has advised that you should only buy virtual currencies if you are aware of the risks.  Treat your digital wallet with the same caution as you would your conventional wallet.

The FCA has published this alert on behalf of the EBA. To find out more, see the full warning.