Cypriot authorities warned the public of the five dangers associated with the use of virtual currencies such as bitcoin.

The Ministries of Finance, Commerce Industry and Tourism and the Central Bank of Cyprus issued a press release warning of the dangers for consumers emanating from virtual currencies, as the Parliamentary Committee of Commerce discussed the issue of bitcoin.

The release outlined five dangers associated with the use of virtual currency.

A customer may loose its money used to acquire virtual currency either from a person which has this currency or from trading platforms. Recalling that recently such platform were subject to attack from hackers, the release noted that trading platforms are not banks which observe virtual currency in the form of deposits. “If a platform looses money or fails there is no legal protections,” the release adds.

It also warns virtual currency is deposited in a digital wallet on a computer of a smart phone, which is not in impregnable from hackers.

The virtual currency’s value is subject to high volatility. It may rise sharply or even fall to zero value.

Furthermore, the release notes that transactions with a virtual currency entail an increased risk are more liable to be misused for illegal activities.

Concluding the release urges the public to look into all risks associated with the use of virtual currencies.