Secretary of State issues warning about digital currencies

1 year 1 month 4 days ago December 15, 2015 Dec 15, 2015 Tuesday, December 15 2015 Tuesday, December 15, 2015 2:41:00 PM CST in News
By: Jenna Middaugh, KOMU 8 Digital Producer

JEFFERSON CITY – The Missouri Secretary of State issued an alert Tuesday warning people to be careful with digital currency investments.

Secretary of State Jason Kander said banks and the government do not issue bitcoin and other digital currencies even though they  may claim to be licensed and regulated by federal, state or other authorities.

Kander said scammers take advantage of the confusion due that comes from inconsistent guidelines.

The Secretary of State said he stopped a bitcoin scam in Springfield. Kander said the scammer convinced online investors to pay for the development of bitcoin “mining” equipment. Mining is the process of solving complex math problems to earn bitcoins.

Kander said the man told investors they’d see unrealistically high returns of 2,812 percent but didn’t tell the investors about the associated risks.

“We always want to remind investors that no amount of caution is too much when it comes to protecting your savings,” said Stephanie Fleming, director of communications for the Missouri Secretary of State’s office. “Whether it’s bitcoin or any other investment fad, be hyper conscious of the risks associated with the investment to protect yourself from fraud.”  

Kander said investors should be aware of the following information:

  • Digital currency value fluctuates wildly because it is decentralized and often the subject of “breaking” news and rumors
  • Hackers are attracted to digital currency because it’s tangible, can be difficult to trace and can be vulnerable to cyber attacks
  • Many fake bitcoin exchanges exist and because all payments are irreversible, completed transactions cannot be undone

Kander said more information can be found by visiting www.MissouriSafeSavings.com or by calling 1-800-721-7996.

[Editor's note: This story has been updated to include a statement from Stephanie Fleming.]

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