US CFPB Now Accepting Complaints Against Bitcoin Businesses
The US Consumer Financial Protection Bureau (CFPB) has warned consumers that they should exercise caution when engaging with the bitcoin and digital currency markets.
The CFPB advisory urges consumers to be vigilant as there are risks to consider when dealing and transacting with digital currency; namely, volatile exchange rates, unclear costs, security threats posed by hackers and scammers and the possibility that companies may not always be able to provide help or refunds for lost or stolen funds.
Notably, the news comes two months after the Government Accountability Office asked the CFPB to look more closely at the digital currency industry.
CFPB Director Richard Cordray echoed the agency’s emphasis on the risk posed by digital currencies in his remarks.
“Virtual currencies may have potential benefits, but consumers need to be cautious and they need to be asking the right questions,” he said. “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.”
The document offers introductions to the products and services offered by digital currency companies – like private keys and wallets – and mentions the risks each carry.
Jaron Lukasiewicz, CEO of prominent Wall Street bitcoin exchange and ECN Coinsetter, said:
“The CFPB’s bulletin provides a comprehensive list of the risks associated with bitcoin, and I encourage anyone who is not already familiar with them to read it. Not covered in the CFPB’s letter are the many benefits to using bitcoin, including the fact that it is a low cost alternative to banking for underprivileged families.”
The CFPB also announced that it is currently accepting complaints from users about products and services in the digital currency market. It lined its advisory with anecdotal complaints it has received thus far.
The CFPB is an independent federal agency responsible for policing financial products and services. The invitation for consumer complaints is its first step in more closely examining the digital currency market.
For example, some individuals have told the CFPB they have been unable to recover lost or stolen funds from exchanges; one user had to discard hard drive that held the private keys to 7,500 BTC; and one sent digital currency without ever hearing back from the other person involved in the trade.
The agency will use the information it collects to better understand how digital currencies affect consumers and help it enforce federal consumer financial laws and take consumer protection policy steps, if need be.
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