Organisation warns of a lack of protection covering the digital money

Mansion for sale in Bitcoins as regulator warns against virtual currency

A multi-million Las Vegas mansion can now be brought using Bitcoins, but a European regulator has warned against investing in the digital cash.

Jack Sommer, owner of the $7.85 million (£4.82 million) 25,000-square-foot home, which lies next to a country club golf course and has a 2,000-square-foot guest house, said that two of his sons had convinced him to accept the virtual currency as payment.

“This house was an exercise in how many cool details we could put in,” he told the Las Vegas Review Journal.

“The advantage is that we’re expanding our market and adding some notoriety.”

Julian Tosh, a local Bitcoin merchant, agreed that the unique offer could boost the house’s presence on the marketplace.

“There are a bunch of people who have Bitcoins, and they’re dying for a place to spend it,” he said.

“If you increase awareness of potential buyers, you could tap into new markets.”

However, the European Banking Authority (EBA) has warned against holding large sums of any virtual currency, including Bitcoins.

The regulator recently stated that as such digital currencies are unregulated, consumers could lose out financially by “trading, holding or buying” them.

"Currently, no specific regulatory protections exist in the EU that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business," the organisation said in a statement.

"Holding virtual currencies may [also] have tax implications, and they should make sure that they give due consideration to whether tax liabilities apply in their country when using virtual currencies."

As well as these possible issues, the EBA also said that Bitcoins are at risk from being stolen by hackers.

Partly notorious due to their ability to be used as anonymous payment on sites such as the Silk Road to buy illegal goods and services, accounts holding Bitcoins can also be frozen as they are searched for unlawful transactions.

"Transactions in virtual currency provide a high degree of anonymity, they may be misused for criminal activities, including money laundering," the EBA explained.

“This misuse could lead law enforcement agencies to close exchange platforms at short notice and prevent consumers from accessing or retrieving any funds that the platforms may be holding for them."

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