CFPB warns consumers you are on your own if using bitcoin, digital currencies

The Consumer Financial Protection Bureau (CFPB) released its first consumer alert regarding bitcoin, dogecoin and other digital currencies last week. The federal agency listed a number of issues that they say have yet to be resolved and could harm unsuspecting consumers who are interested in the cryptocurrency industry.

In its blog post, the CFPB warned that virtual currencies are big targets for hackers who have the ability to infiltrate security systems, while alluding to fraudsters who can take advantage of consumers who may buy into the “hype surrounding virtual currencies.”

Although this type of alert is nothing new – we have reported on dozens of alerts and advisories – some bitcoiners took exception to one comment made by the CFPB. It stated that digital currencies can cost consumers more to use than credit cards and cash because of exchange rates. Bitcoiners ventured to the comment section to point out that it’s a lot cheaper to use bitcoin, which is why consumers and merchants are utilizing the digital currency in record numbers.

Finally, the CFPB averred that if a company is holding onto your digital reserves and the company goes bankrupt then clients may not get the same kind of assistance that consumers would receive from traditional financial institutions and credit card providers.

The CFPB urged individuals to final a complaint if they experience a difficulty with any sort of digital currency product or service. Once the entity receives the submitted complaint then it’ll contact the company in question and attempt to garner a response.

“Complaint data helps us understand what business practices may pose risks to consumers. We’ll use the information to enforce federal consumer financial laws and, if appropriate, take policy steps,” the CFPB said in its blog post.

Some bitcoiners lambasted the statement, including one user named “Satoshi,” who wrote: “Did the fine folks at Visa and MasterCard write this warning themselves? I would imagine they’ll fabricate most of the phony complaints as well.”