--- description: SEC issued a warning Wednesday that Bitcoin investors are at a high risk for fraud and theft title: SEC Warns of Bitcoin Dangers image: https://static.time.com/v3/assets/bltea6093859af6183b/bltc589d5dfe321d43b/69868e44cd804d58a6ccabd1/bitcoin1.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 ---  * [World](/section/world/) ## World Update your preferences in [Account Settings](/account/preferences/) Close # SEC Warns Investors on Bitcoin by [Sam Frizell](/author/sam-frizell/) ## Sam Frizell Update your preferences in [Account Settings](/account/preferences/) Close May 7, 2014 8:40 PM CUT  This May 1, 2014 photo taken in Washington, DC shows bitcoin medals. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. AFP PHOTO / Karen BLEIER (Photo credit should read KAREN BLEIER/AFP/Getty Images) This May 1, 2014 photo taken in Washington, DC shows bitcoin medals. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. AFP PHOTO / Karen BLEIER (Photo credit should read KAREN BLEIER/AFP/Getty Images)KAREN BLEIER—AFP/Getty Images by [Sam Frizell](/author/sam-frizell/) ## Sam Frizell Update your preferences in [Account Settings](/account/preferences/) Close May 7, 2014 8:40 PM CUT The U.S. Securities and Exchange Commission (SEC) issued an [alert to investors](http://investor.gov/news-alerts/investor-alerts/investor-alert-bitcoin-other-virtual-currency-related-investments#.U2qZKsb%5FQ1f "undefined") Wednesday warning about the risks of trading Bitcoins and other virtual currencies. The SEC said that investors might be lured by the potential investments in something “novel, new and cutting-edge” but that Bitcoin represents a significant risk. “A new product, technology, or innovation – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities,” the SEC said. New technologies make Bitcoin ripe for fraudulent schemes, and the victims of theft may have limited options for recovering lost currency. In addition, Bitcoins are not insured and transfers of the currency are difficult to trace. “Scam artists take advantage of Bitcoin users’ vested interest in the success of Bitcoin to lure these users into Bitcoin-related investment schemes,” the notice warns. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/91398/sec-bitcoin-warning/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/91398/sec-bitcoin-warning/"},"headline":"SEC Warns Investors on Bitcoin","datePublished":"2014-05-07T20:40:56.000Z","dateModified":"2026-02-21T07:42:39.355Z","description":"The warning reflects regulatory agencies' growing concern about the dangers of the new and virtually unregulated market","url":"https://time.com/91398/sec-bitcoin-warning/","keywords":["Money","Bitcoin"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/bltc589d5dfe321d43b/69868e44cd804d58a6ccabd1/bitcoin1.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Sam Frizell","jobTitle":null,"url":"https://time.com/author/sam-frizell/"}],"articleSection":"World","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/bltc589d5dfe321d43b/69868e44cd804d58a6ccabd1/bitcoin1.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"US-IT-FINANCE-BITCOIN","caption":"US-IT-FINANCE-BITCOIN","creditText":"KAREN BLEIER—AFP/Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/world/","name":"World"}},{"@type":"ListItem","position":2,"item":{"@id":"https://time.com/91398/sec-bitcoin-warning/","name":"SEC Warns Investors on Bitcoin"}}]}] ```