The government’s stand on Bitcoin in the United States is confusing at the most. Each state has the power to implement its own regulations against bitcoin and some of them like the State of New York has already chosen to implement tough measures like BitLicense. The State of Washington has now issued an advisory, warning against the use of bitcoin and other digital currency. The new advisory warns the residents about investing in bitcoin and other digital currencies.
The United States already considers bitcoin as property, currency, money and commodity, imposing multiple taxes. However, bitcoin still does not enjoy a clear legal status in the country and it still falls under high risk, borderline legal asset. The advisory also warns against investments in marijuana related business ventures and binary options.
Washington State Department of Financial Services’ advisory seems to be influenced by the emergence of these three sectors in the recent days, attracting a lot of investment. The surge in bitcoin investments in the recent days can be attributed to the sudden surge in bitcoin price in the recent days, while marijuana businesses have started to gain traction after it was legalized in many states across the United States.
The advisory also clarifies that marijuana is not legal across the country, except for few states and at a federal level it is still considered illegal. This makes businesses built around marijuana to be semi-legitimate and there is always a threat of these businesses shutting down due to regulatory and legal issues. It may result in huge losses to investors in such businesses. Similarly, binary options are more of a gambling than trading and depends upon prediction. In binary options, the investor may either gain a fixed amount if the prediction is right or end up losing the whole investment if it goes wrong. The risk associated with binary trading is far more than the gains.
When it comes to bitcoin, the Washington State Department of Financial Services is concerned about the price volatility and potential losses associated with it.