Dive Brief:

• The U.S. Consumer Financial Protection Bureau (CFPB), a government consumer protection agency, Monday released an advisory to consumers warning them of the financial and security risks of virtual currencies like bitcoin.

• The advisory contains guidance on how to buy and use bitcoin and related currencies, saying they have potential for innovation, but also notes that they hold potential for innovation from hackers and scam artists, too.

• The CFPB also said that excitement around bitcoin makes it ripe for old-fashioned Ponzi schemes and losses from price fluctuations.

Dive Insight:

Bitcoin advocates have responded to this warning with the argument that cash itself holds similar risks, and that the report doesn’t explain the benefits of bitcoin. But, really, this is a useful and level-headed document regarding the state-of-the-art of bitcoin and the potential harm to unwary consumers. That’s especially needed at a time when more retailers are accepting bitcoin and helping edge it into the mainstream.