Securities regulator issues warning over bitcoin ATMs & threatens prosecution
Canada issued it’s first official regulatory response to bitcoin today and it came from the Autorité des marchés financiers which issued an alert to consumers about the use of bitcoin.
The Autorité, which is Québec’s securities commission, said in a statement that it will prosecute bitcoin businesses for violations under the Securities Act, the Derivatives Act and the Money Services Businesses Act.
The statement was in response to the introduction in Québec of ATM machines at a retail location that accepts cash and sell bitcoins.
The Authorité said that bitcoin and other digital currencies, also known as crypto currencies, are not covered by the financial services compensation fund or the deposit insurance fund and warned Canadians that they may lose money from bitcoin.
The Autorité stated that bitcoin may result in the creation of Ponzi schemes by fraudsters and may be used to facilitate fraudulent transactions or false investments. However, it does not necessarily follow that an ATM transaction gives rise to greater Ponzi scheme or fraudulent transaction risks merely by virtue of the fact that bitcoin is involved.
The Authorité referred to the bulletin issued several months ago from the Banque de France which warned, inter alia, of the money laundering and terrorist financing dangers of bitcoin and other virtual currencies as a result of its anonymity.