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French regulators issue warning on bitcoin

BitcoinThe exponential rise in the value of bitcoin to over $11,000 (€9,280) last month has prompted France’s two main financial regulators to issue a warning to savers on the volatility of the cryptocurrency.

A joint statement issued by the Autorité des Marchés Financiers (AMF) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) warned that savers needed to bear in mind “the risks associated with investing in these speculative assets”.

“Bitcoin’s operation is based on a network without intermediaries, and does not constitute legal tender contrary to currencies issued by central banks,” the statement said.

The statement added that, while bitcoin had risen in value massively in recent weeks its value could collapse unexpectedly just as quickly as it had risen.

“The purchase and sale of and investment in bitcoin currently takes place outside any regulated market,” the statement said.

“Investors are therefore exposed to very high risks of a correction and do not benefit from any guarantee or protection of invested capital.”

While the two authorities said that the blockchain distributed ledger system was a potential source of innovation “the AMF and the ACPR recommend that investors be extremely vigilant when considering whether to invest a portion of their savings in this asset”.

Last month asset manager Paris-based Tobam launched Europe’s first bitcoin mutual fund.

©2017 funds europe