What has happened?

Italy has become the latest country cautioning the public about the risks attached the virtual currencies.

What does this mean?

The Bank of Italy has published a warning addressed to consumers concerning the risks related to the use of virtual currencies.

In line with the previous warnings published in 2015, the main aspects highlighted by Bank of Italy are:

  • the loss of the amount used to buy virtual currencies, which may be due to malfunctioning, cyber attacks and loss of the password of the relevant e-wallet;
  • the absence of legal and contractual protection;
  • the lack of transparency and safeguards; and
  • the risk associated with the use of virtual currencies for criminal activities, including money laundering.

The Bank of Italy also shared the warning published by the European Banking Authority, the European Securities Markets Authority and the European Insurance and Occupational Pensions Authority in February 2018 and summarised the risks highlighted therein.

Italy joins a growing list of national and supranational regulators that have recently cautioned consumers about the risks related to virtual currencies.

For example, just last week, the Commission de Surveillance du Secteur Financier of Luxembourg also issued a similar warning.

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