Kander warns of bitcoin risks

Missouri investors might want to think twice before buying in to digital currency such as bitcoin, Secretary of State Jason Kander warned in a news release Thursday.

Poorly understood or insufficiently vetted online financial products carry serious risk for investors, Kander cautioned, noting those who invest in bitcoins could lose money if businesses accepting them as payment decide to stop.

Bitcoins are a form of digital currency used to buy products from some online businesses. Users obtain them either by solving complex math problems online or by buying them from other users, with their names typically remaining anonymous, the release stated.

Prices have fluctuated wildly, and federal regulators still are trying to determine how to handle bitcoins, which are not issued by banks or the government, Kander reported. The IRS considers them property rather than currency, so users who sell them at a profit could be on the hook for capital gains taxes, the release stated.

In addition to the risk of bitcoins losing their value, users face the possibility of being hacked or defrauded through fake bitcoin exchange scams, Kander reported.

For more information or to check out a prospective investment, visit MissouriSafeSavings.com or call Kander's office at 800-721-7996.