The U.S. Securities and Exchange Commission issued an investor alert regarding bitcoin. The agency claims the move is aimed at making investors aware about the potential risks of investments involving bitcoin and other forms of virtual currency. Some of the highlighted risks include the higher volatility of bitcoin compared to other investment vehicles, as well as the lack of protection in cases where a bitcoin exchange goes belly up.
The SEC says that as a new invention, bitcoin does not have an established track record of credibility and trust. "Bitcoin and other virtual currencies are evolving," the warning reads.
MasterCard Goes to Washington
MasterCard (MA) hired Peck Madigan Jones to lobby in Washington D.C. on the topic of bitcoin and other cryptocurrencies (among other MasterCard policy issues). It is unclear if the PMJ lobbying will be in favor of bitcoin. However, taking into account the fact that cryptocurrencies are a potential threat to the MasterCard business model, this doesn't seem likely.
Coincidently or not, a few weeks later, members of the House Appropriations Committee announced they have concerns with "virtual currencies like bitcoin." Lawmakers are worried that criminals and terrorists may be using virtual currencies to launder and transfer money, and added they are waiting for a briefing on the matter from the FBI. Not long after this statement, we also got the SEC investor alert.So far the latest moves from Washington have had little to no effect on the price. It remains to be seen if investors will get spooked by the latest warnings coming from the U.S. capital. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. >>Read more: Geithner's Most Candid Crisis Moments as Told to Jim Cramer
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