10 Updates

SEC Warns Investors To Beware Of Bitcoin

May 9 2014, 10:59am CDT | by

For the second time in months, the Securities and Exchange Commission issued a warning alerting investors about the hazards of Bitcoin and other virtual currencies. The move marks another effort by...

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11 weeks ago

SEC Warns Investors To Beware Of Bitcoin

May 9 2014, 10:59am CDT | by

For the second time in months, the Securities and Exchange Commission issued a warning alerting investors about the hazards of Bitcoin and other virtual currencies. The move marks another effort by regulators to come to grips with a revolutionary technology that has been the darling of both Silicon Valley and the media. And it underscores the government’s concerns over the dangers virtual currencies pose to retail investors.

“A new product, technology, or innovation – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities,” the SEC’s alert exclaimed on Wednesday.

The SEC is most concerned with the hype surrounding the new technology and the tendency for investors to switch off their skepticism when approached with an opportunity that is both little understood and promoted as the next get-rich-quick investment. Much of the language used by the commission – it warns investors to be weary of any investment that “sounds too good to be true,” for example – could apply to the latest can’t-miss financial product, a miraculous cure for a terminal disease, or any other exotic investment fad.

Bitcoin’s enigmatic characteristics make it all the more feasible for swindlers to dupe would-be investors. It is a digital, non-fiat currency that allows for some level of anonymity for users. Its value has fluctuated wildly and without many reliable institutions offering consumer-friendly access to the currency, it has remained obscure to mainstream users. Yet, though few people have begun to use the currency, its meteoric rise against the dollar – it went from nearly zero to a high eclipsing $1,100 in the span of a few months last year – along with the well-publicized endorsement it has received from Silicon Valley heavyweights such as Netscape founder Marc Andreessen have infused the technology with an aura of excitement last seen with the rise of Facebook and Twitter.

This combination makes it ripe for abuse, specially for investors desperate to capture the type of oversized returns enjoyed by early-movers in the Internet and social media.

It has also drawn concern from regulators. Last summer, the SEC brought an action against Bitcoin Savings and Trust for allegedly running a Ponzi scheme that defrauded dozens of investors of nearly $5 million. The Justice Department has also targeted individuals and companies that have used Bitcoin and other virtual currencies to conduct or mask criminal behavior.

They are not alone but the government’s response, unlike the SEC’s recent alert and the DOJ’s prosecutions, hasn’t always been negative. In March, 2013, FinCEN, the unit within the Treasury Department assigned to combat money laundering and other financial crimes, required virtual currency exchanges and other businesses to adhere to anti-money laundering laws. The move, which came as a surprise to many Bitcoin backers, granted the technology instant legitimacy by allowing the virtual currency to operate within the government’s legal framework rather than facing an outright ban. FinCEN’s guidance ushered in a wave of investments from established venture capital firms that had remained on the sidelines fearing that the virtual currency would not receive the government’s imprimatur.

More recently, the Internal Revenue Service issued guidance in March categorizing virtual currencies as property. And just yesterday, the Federal Election Commission weighed in, declaring that PACs may receive donations in bitcoins.

Led by New York Department of Financial Services Superintendent Benjamin Lawsky, state regulators have also been trying to determine how to apply preexisting laws to Bitcoin, which can serve as a currency, commodity, or transfer mechanism of various forms of property or information.

So far, the regulatory response to Bitcoin and other virtual currencies has been tepid as regulators try to balance a desire to promote the potentially revolutionary technology while still protecting consumers and investors from fraud. Several key regulators have also declined to chime in at this point: neither the Federal Reserve Bank nor the Commodity Futures Trading Commission have issued formal guidance. And, on the surface at least, the regulatory response has taken on a shape-shifting quality with each agency categorizing Bitcoin differently. In that sense, at least, the regulatory response mirrors Bitcoin, the technology that no one has been able to neatly classify.

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the D ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

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KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into b ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Ra ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern st ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 m ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister D ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM20 million. ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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