EU watchdog warns of Bitcoin risks

People using Bitcoins are on their own when it comes to losses, the EU’s banking watchdog said yesterday in a warning to consumers on the risks of using unregulated online currencies.

The European Banking Authority (EBA) said that there was no protection or compensation for people whose “digital wallets” are hacked, a transfer of virtual money goes wrong, or a platform is shut.

The EBA stopped short of telling consumers not to use online currency markets but said if they end up out of pocket, there won’t be a safety net like the compensation given to deposit holders when a mainstream EU bank goes bust.