A new publication from Connecticut’s Department of Banking discusses virtual currency (like Bitcoin) and some of the risks associated with it.
A virtual currency is an electronic medium of exchange that is not controlled or backed by a government or central bank. While all investments involve risks, the publication points out that investing in virtual currencies involves additional risks such as minimal regulation of the currency and the companies offering the currency and related products; susceptibility to hacking; and, unlike bank accounts, lack of federal insurance for deposits.
More information on Bitcoin and virtual currencies is also available in OLR Report 2014-R-0050.
