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State Issues Warning About Bitcoins

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A bitcoin machine at South Station. (WBZ-TV)

A bitcoin machine at South Station. (WBZ-TV)

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BOSTON (CBS) — Massachusetts is issuing a warning about the new digital currency, bitcoin.

The Office of Consumer Affairs says bitcoin is not backed by any government, so they can suddenly lose value.

The warning comes after a bitcoin ATM was recently installed at South Station. The machine has since been removed for maintenance.

The Mass. Office of Consumer Affairs and Business Regulation advises consumers who may consider purchasing the digital or virtual currency to proceed with caution because of the high-financial risks involved.

Last week, the bitcoin exchange was shut down, resulting in hundreds of millions of dollars worth of lost bitcoins.

According to the Office of Consumer Affairs, proponents of bitcoin make the point that this virtual currency allows for a faster, no-fee payment system, which is attractive to both merchants and consumers. But the office is warning consumers to consider the risks before buying bitcoins online or at an ATM.

Basic Facts on Bitcoin
Via Office of Consumer Affairs

· It’s a high-risk currency because of the volatility in its price.

· It’s not backed by any central banks worldwide and has no tangible value.

· It’s an experimental concept.

· It’s unregulated and does not provide protection for consumers.

· Consumer disclosure rules and regulations are limited or nonexistent.

· It is not insured or backed by any government or regulatory structure.

· No company is required to accept bitcoins as a form of payment.

MORE LOCAL NEWS FROM CBS BOSTON

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