Last Tuesday, another warning against the usage of Bitcoin was thrown into the world. The Massachusetts Consumer Affairs Office issued an official consumer alert, warning people about the risks of buying and trading the virtual currency.
The alert isn’t any different from previous warnings we’ve seen, but it’s special since it was issued by the state of Massachusetts. The state recently made headlines when one of America’s first Bitcoin ATMs was surprisingly launched in Boston South Station, one of Bostons largest stations in the metropolitan area. Liberty Teller, the company behind the Boston Bitcoin ATM, launched their second ATM in Boston earlier this week, as reported on CCN.
When asked for a specific reason for this warning, it seems both the collapse of Bitcoin exchange Mt. Gox and the Bitcoin ATM in Boston’s South Station are cause of it. The Office claims that they are investigating the Liberty Teller Bitcoin ATM, trying to determine if it requires licensing or not. The collapsing of Mt. Gox needs no further explanation. Every country that takes a cautious stance towards cryptocurrencies uses Mt. Gox as a valid reason for doing so. The surprising part of the warning is the timing. Bitcoin has been gaining popularity for a long time, while the Bitcoin ATM and Mt. Gox crashing are weeks old at this point. It seems there has been a lot of debate prior to issuing a warning.
Part of the alert has been made public on the Internet. It reads:
“The Office of Consumer Affairs and Business Regulation advises consumers who may consider purchasing the digital or virtual currency Bitcoin to proceed with caution because of the high-financial risks involved.
Just last week, the largest Bitcoin exchange shut down resulting in hundreds of millions of dollars’ worth of lost bitcoins. A couple of weeks ago, a Bitcoin “ATM” opened up in South Station. While this operation closely resembles an ATM, the kiosk performs quite differently. It does not provide cash, but instead allows consumers to load bitcoins onto a virtual wallet either accessed by an app downloaded onto a smartphone or through a code provided on a piece of paper that is unique to each consumer.
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. While there is a demand for a faster and more efficient commercial payment system, the question is whether bitcoins are the most appropriate and safest alternative to satisfy that demand.
Before purchasing bitcoins either online or through a kiosk, consumers are strongly advised to consider the risks.”
The impact of this event on Bitcoin’s popularity in the state of Massachusetts is uncertain. Bitcoin fanatics usually aren’t very interested in official statements like these. More dangerous is the reaction of people who haven’t been initiated to cryptocurrencies for a long time yet. The ATMs may have sparked their interest, while this warning could very well scare them away again. It’s a shame that official instances use Mt. Gox as a way to fear monger, since what happened there has nothing to do with the Bitcoin protocol or what it stands for. Let’s hope people see through these messages, appreciating Bitcoin for what it really is. A way to revolutionize money.
Last modified: October 6, 2014 10:25 UTC