CFPB warns consumers about ‘Wild West’ of Bitcoin market

The US Consumer Financial Protection Bureau (CFPB) has issued a warning to consumers about the dangers of virtual currencies such as Bitcoin.

Referring to virtual currencies products and services as the ‘Wild West’ of finance, the consumer advisory released on Monday says that potential risks included big swings in exchange rates, noting that the value of Bitcoin fell as much as 80 per cent against the US dollars in a single day this year, opening investors up to huge potential losses.

The CFPB also warned of issues with unclear costs, the lack of consumer protections normally provided by traditional naks or credit card suppliers, as well as the risks posed by hackers. The CFPB also announced that consumers who encounter a problem with a virtual currency product or service can now submit a complaint with the Bureau.

Virtual currencies may have potential benefits, but consumers need to be cautious and they need to be asking the right questions,” said CFPB Director Richard Cordray in a statement.

“Virtual currencies are not backed by any government or central bank, and at this point consumers are stepping into the Wild West when they engage in the market.”

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