The United States Security and Exchange Commission (SEC) has recently alerted investors to the risk in trading and using virtual currencies like Bitcoin.
The SEC released “Investments involving Bitcoin present unique risks” which states that governments and banks have no association with these virtual currencies and will not be covered by FDIC insurance resulting in unrecoverable losses.
The fraud risk is another issue specifically with Bitcoin investment schemes since the currency is so new that fraudsters do not yet fully understand the product and will be led by the "get rich quick" success stories.
The SEC recommends that investors thoroughly research virtual currencies and their markets prior to investing.