European Commission warns on bitcoin risks

European Commission warns on bitcoin risks
FILE PHOTO: Broken representations of the Bitcoin virtual currency, placed on a monitor that displays binary digits, are seen in this illustration picture, December 8, 2017. REUTERS/Dado Ruvic/Illustration/File Photo
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BRUSSELS (Reuters) – The European Commission warned on Wednesday of risks for investors and consumers from the virtual currency bitcoin, including the chances of losing their entire investment.

European Commission Vice President Valdis Dombrovskis said he was concerned about big fluctuations in the value of bitcoin, noting that the digital currency is not guaranteed by any country or issuer.

“In recent weeks, bitcoin has our heightened attention. There are clear risks for investors and consumers associated with price volatility, including the risk of complete loss of investment, operational and security failures, market manipulation and liability gaps,” he told a news conference.

“Investors should realise that it can drop at any moment. Virtual currencies like bitcoin are not really currencies.”

Dombrovskis said he had written to EU banking and markets watchdogs to ask them to update their warnings on the risks of investing in bitcoin.

The bitcoin’s monumental gains this year – its price has soared about 19 times – have led to increasing concern over what the fallout could be if the bubble were to suddenly burst.

(Reporting by Robin Emmott; editing by Mark Heinrich)

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