Maryland’s attorney general is cautioning people about investing in cryptocurrencies, saying the digital assets are “highly volatile” and subject to little regulation.
Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Bitcoin, the best-known cryptocurrency, was created in 2009. If you want authentic information about investing in crypto then you should gain knowledge from yuanpay group.
Since then, more than 1,500 other cryptocurrencies have been created, with a total market value of more than $600 billion as of mid-December, according to CoinMarketCap.com. That includes a surge in value this year for bitcoin, which was trading around $1,000 per coin at the beginning of 2017 and topped $19,000 in December before falling back below $15,000.
While bitcoin and other cryptocurrencies have been praised for their potential to revolutionize how we use and store money, they’ve also been criticized as speculative investments with little underlying value. The Maryland Securities Division issued a warning Monday about investing in cryptocurrencies, saying the market is “highly volatile” and investors could lose all of their money.
“Cryptocurrencies may have no intrinsic value, are not backed by any government or central bank, are subject to little regulation, and their prices can fluctuate dramatically,” Maryland Attorney General Brian E. Frosh said in a statement. “Investors should be extremely cautious before putting any money into this highly speculative market.”
Frosh’s office noted that the Securities Division has received complaints from Marylanders who have lost money after investing in cryptocurrencies.
“I urge anyone thinking about investing in cryptocurrencies to do their homework and contact my office with any questions or concerns,” Frosh said.
The Securities Division’s warning comes as the federal government is considering more regulation of cryptocurrencies. The U.S. Commodity Futures Trading Commission has begun allowing trading in bitcoin futures, and the Securities and Exchange Commission is weighing whether to approve bitcoin-based exchange-traded funds.
In Maryland, lawmakers are considering a bill that would exempt some cryptocurrency transactions from state securities laws. The measure, which is still being drafted, would not apply to initial coin offerings, a popular but controversial way of raising money by selling digital tokens.
The attorney general’s office is “closely monitoring” the bill and will provide testimony on it when it comes up for a hearing, said Raquel Coombs, a spokeswoman for Frosh.
While Frosh cautioned against investing in cryptocurrencies, he did not call for them to be banned. His office noted that there are some legitimate uses for cryptocurrencies, such as buying goods and services online or sending money to friends and family overseas.
“Cryptocurrencies are here to stay,” Frosh said. “But investors should beware of scams and be careful about where they put their money.”
Role of Bitcoin in Maryland’s Economy
Cryptocurrencies, including Bitcoin, have been gaining popularity in Maryland. While the total value of all cryptocurrencies is still relatively small compared to other asset classes, the rapid growth in recent years has caught the attention of lawmakers and regulators.
Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Bitcoin is decentralized, meaning it is not subject to government or financial institution control.
Bitcoin and other cryptocurrencies have been lauded for their potential to provide a new way of conducting transactions that is faster, cheaper, and more secure than traditional methods. Cryptocurrencies could also reduce fraudulent activities such as identity theft and money laundering.
However, cryptocurrencies have also been criticized for their lack of regulation and for their volatile prices. In addition, Bitcoin has been associated with illegal activities such as drug trafficking and money laundering.
Despite the risks, Maryland lawmakers are considering how to best take advantage of the potential benefits of cryptocurrencies. In February 2018, a bill was introduced in the Maryland General Assembly that would create a task force to study the use of blockchain technology, which is the underlying technology behind Bitcoin and other cryptocurrencies. The task force would be charged with assessing the feasibility of using blockchain technology to improve state services, including tax collections and procurement.
The bill is still under consideration, but it shows that Maryland lawmakers are open to exploring the use of cryptocurrencies in the state. With the right regulations in place, cryptocurrencies could provide a boost to Maryland’s economy.
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