Virtual Currencies (NAPSA)—Therecent run-up in price for Bitcoin and other virtual currencies has piqued investors’ interest. However, the U.S. Commodity Futures Trading Commission (CFTC)advises investors to understand the risks that go with virtual currencies before adding them to their portfolios. Whatis Bitcoin? Bitcoin is a convertible virtual cur- rency. Virtual currencyis a digital representation of value that may function as a medium of exchange, a unit of account, and/or a store of value. 1975 ~ The Commodity Futures Trading Commission helps investors learn about virtual currencies and their possible risks. Is Bitcoin a commodity? Yes, Bitcoin and other virtual currencies have been determined to be commodities under the Commodity Exchange Act (CEA). Does the CFTC oversee Bitcoin? The CFTC’s jurisdiction is implicated whena virtual currencyis used in a derivatives contract, such as futures or options contracts. The CFTC’s oversight over commodity cash marketsis limited. The CFTC maintains general anti-fraud and manipulation enforcement author- ity over virtual currency cash markets as a commodity in interstate commerce. Whatrisks comewith virtual currencies? While virtual currencies may have potential benefits, purchasing virtual cur- rencies on the cash market—spending dollars to purchase Bitcoin for your personal wallet, for example—comes with a numberofsignificantrisks, including: * Most cash markets are not regulated or supervised by a federal government agency. Platforms in the cash market may lack system safeguards, including customer protections. Cash market manipulation. * Platforms selling from their own accounts and putting customers at a disadvantage. Price volatility risks. Cybersecurity risks. Whatdo I do if I suspect fraud? To report suspicious activity, contact the CFTC at (866) 366-2382, consum ers@cftc.gov, or visit SmartCheck.gov/ SubmitaTip. For more information, visit www. cfic.gov/bitcoin. This article was prepared by the US. Commodity Futures Trading Commissions Office of Customer Education and Outreach. The article is provided for general informational purposes only and does not provide legal or investment advice to any individual or entity. Please consult with your own legal adviser before taking any action basedon this information.
