With the introduction of the machines to dispense virtual currency, such as Bitcoins, at certain businesses in Quebec, the Autorité des marchés financiers (AMF) has issued a warning about the risks associated with these cryptocurrencies.

The AMF stresses that transactions involving virtual currency are not covered by its financial services compensation fund, or deposit insurance.

“Quebeckers should therefore be careful with virtual currency transactions as they may incur losses that are not covered under current compensation or deposit insurance plans,” it says.

It also notes that various regulators, including the U.S. Securities and Exchange Commission (SEC) and the Banque de France, recently warned consumers about the heightened risk of fraud related to virtual currency.

“The anonymity of virtual currency transactions and their relatively low costs may entice fraudsters to set up Ponzi and other schemes to lure investors. Virtual currency may be used to facilitate fraudulent transactions or simply fabricate fraudulent investments,” it says.

The AMF notes that it is closely monitoring the introduction of virtual currency in Quebec and says that it will take action if it observes any violations of securities laws, derivatives laws, or any other statutes.