The European Banking Authority (EBA) today issued a warning on the risks of buying, holding or trading virtual currency like Bitcoin. The main issue is that consumers are not protected by any regulation when using these currencies and may run a risk of losing their money. This warning comes during an ongoing investigation by the EBA on whether virtual currencies can or should be supervised. Consumers should be especially aware of exchange platforms, since they are unregulated. If one of these platforms goes out of business or fails unexpectedly, there is no formal regulation to prevent a loss to the consumers. Virtual currencies sometimes provide an umbrella for illegal activities as they provide anonymity. Misuse of exchange platforms may lead to closure in a very short notice and this may entail losses to users who have money kept by these platforms. Other potential problems could arise from the digital wallets which are not impervious to hackers. Furthermore, current EU regulations do not cover transactions with virtual currencies, so consumers cannot benefit from the right to return products. Tax issues are another murky area for virtual currency users who should consult carefully their national authorities what are the exact tax liabilities in the given country.