Washington Consumer Alert About Bitcoin Investing Misses The Mark

The Washington State Department of Financial Institutions (DFI) has warned consumers about investing in bitcoin and digital currency, along with…

The Washington State Department of Financial Institutions (DFI) has warned consumers about investing in bitcoin and digital currency, along with marijuana and binary contract investments. The notice has been posted on the department’s “news and alerts” section and is titled, “Beware of the Next Big Investment.”

State Capitol Building

Marijuana, binary options and digital currency have recently emerged as investments that buyers and sellers hope will be “the next big thing,” the alert notes.

The notice addresses bitcoin after first describing the other two investments and devotes significantly less information about bitcoin and digital currency.

Consumer Media Reports The Alert

The notice might not have been read by many Washingtonians, but it was reported as a news item the next day (Nov. 11) by The News Tribune in Tacoma, Wash. in the newspaper’s business section.

The notice says bitcoin and digital currency are poised to be in the headlines as new exchanges emerge that claim to be regulated by government authorities at the federal, state or jurisdictional levels and more name brand retailers accept payment in digital currency.

As digital currencies gain the attention of regulators and private companies, the department says investors need to be aware of certain information when approached with investment opportunities. It lists the following:

• Digital currency value fluctuates wildly since it is decentralized and frequently subject to news and rumors.

• Because countries and jurisdictions have little uniformity in regulating digital currency, scammers will take advantage of the “confusion and contradictions” to misinform investors.

• Hackers are drawn to digital currency because it is intangible, hard to trace and “vulnerable to cyberattacks.”

A Murky Message At Best

In this writer’s opinion, this notice, if intended to inform consumers about digital currency, does not give a good overview of digital currency. There are numerous websites that give good overviews of digital currency for consumers. The department could have referenced clearer and more comprehensive information.

The information about marijuana and binary investments was more thorough.

There is other information about digital currency elsewhere on the department’s website that is more comprehensive. Unfortunately, a more comprehensive overview that posted on May 14, 2014 was not reported by The News Tribune.

Governments have a responsibility to inform citizens about potential scams. Public agencies deserve credit for taking this responsibility seriously, but they need to be thorough, accurate, and consistent in providing information.

Images from Shutterstock and the DFI.

Last modified (UTC): November 12, 2015 10:30 AM

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Lester Coleman

Lester Coleman is a media relations consultant for the payments and automated retailing industries.

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