Only a week ago in Malta, the local press reported the first Bitcoin ATM in the European island nation. Today, the Maltese financial watchdog has issued a warning against it. Unlike authorities in other parts of the world, the Maltese authorities have not indicated that they intend to take any action against the service provider, despite the risks they assign to it.
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The Malta Financial Services Authority (MFSA) informs the public that cryptocurrency such as Bitcoin is unregulated, not guaranteed by a central bank or by any other authority and is not equivalent to traditional currencies. Furthermore, providers of services in relation to cryptocurrencies are currently neither regulated by law nor authorised by the MFSA.
The MFSA warns that the public therefore should be aware of the following risks: money may be lost on the exchange platform, money may be stolen from your digital wallet, you are not protected when using virtual currencies as a means of payment, the value of virtual currency can change quickly, and could even drop to zero, transactions in virtual currency may be misused for criminal activities.
The MFSA therefore advises the public to exercise caution and be vigilant when dealing with cryptocurrencies and to ensure that they have understood the risks involved: “If you buy virtual currencies, you should be fully aware and understand their specific characteristics. You should also exercise the same caution with your digital wallet as you would do with your conventional wallet. You should not keep large amounts of money in it and ensure you keep it safe and secure. You should also familiarise yourself with the ownership, reputability, transparency and public perception of the exchange platforms that you are considering using.”