News Release: State Warns Consumers on Potential Bitcoin Issues
Posted on Feb 26, 2014
DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Division of Financial Institutions
KEALII S. LOPEZ
COMMISSIONER OF FINANCIAL INSTITUTIONS
FOR IMMEDIATE RELEASE
Feb. 26, 2014
State Warns Consumers on Potential Bitcoin Issues
HONOLULU — This week’s collapse of a major bitcoin exchange, a medium for electronic cash or “crypto-currency,” has triggered many questions, and the Department of Commerce and Consumer Affairs’ (DCCA) Division of Financial Institutions (DFI) wants the public to be aware that no company is licensed to transmit bitcoin in Hawaii.
DFI licenses money transmitters in Hawaii and has not licensed any crypto-currency companies to do bitcoin exchanges, wallets or “mining” activity. If companies are offering to transmit bitcoins, they are doing so in violation of Hawaii’s money transmitter laws.
“If anyone has suffered any losses, the crypto-currency is not insured by the Federal Deposit Insurance Corp. (FDIC), and any recovery would have to be done through the company that either ‘mined’ or sold the crypto-currency to the consumer,” DFI Commissioner Iris Ikeda Catalani said.
Consumers should be aware that if they purchased merchandise or goods using bitcoin, the merchandise may or may not be delivered, or the consumer may have to pay U.S. dollars for the merchandise or goods.
Bitcoin is a crypto-currency that uses money in a digital form. The currency uses cryptography to create and transfer the funds.
DFI ensures the safety and soundness of state-chartered and state-licensed financial institutions, as well as ensures regulatory compliance by state-licensed financial institutions, escrow depositories, money transmitters, mortgage servicers, mortgage loan originators and mortgage loan originator companies, by fairly administering applicable statutes and rules in order to protect the rights and funds of depositors, borrowers, consumers and other members of the public.
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DCCA Communications Officer