Bitcoin lacks 'credibility and trust,' US SEC says

The U.S. SEC warns of frauds and scams involving the virtual currency

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.

"As a recent invention, Bitcoin does not have an established track record of credibility and trust," the agency wrote in its advisory.

The statement perhaps conflates the pure technology of the bitcoin protocol that transfers the virtual currency, which has been vetted by cryptography experts as solid, with the nearly innumerable thefts, scams and failures of bitcoin-related businesses.

Bitcoin, which launched in 2009, has seen a fair share of challenges, including vacillating exchange rates and regulatory restrictions in countries such as China.

To back up its claim of bitcoin's track record, the SEC cited the February collapse of Mt. Gox, the Japan-based exchange that said it lost some 650,000 bitcoins and US$28 million in cash, confirming suspicions the exchange that once dominated bitcoin trading was in trouble.

Law enforcement and the SEC may also have trouble investigating bitcoin-related cases, the warning said, since banks are not involved with bitcoin transactions and there is no central authority to obtain information on users.

The SEC must rely on other sources for information in such cases, such as bitcoin exchanges or users. Seizing and freezing proceeds that are in bitcoin can also be difficult, the SEC said.

Of course, many of those supposed weaknesses are also what makes bitcoin attractive to certain kinds of users.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags U.S. Securities and Exchange CommissionInternet-based applications and servicesgovernmentinternet

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jeremy Kirk

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?