E-currency industry. Lack of transparency: currently opening the wallet for virtual money, as a rule, does not require any special formalities, especially when it is done by downloading software. Opening an account in virtual currency can also be carried out through a service provider, in which case this service provider can perform certain formalities of identity verification without any legal obligations. One of the main interests of virtual currencies is that they allow complete anonymity of transactions. For many cryptocurrencies, if the identification data of the beneficiaries and principals is encrypted, on the other hand, the transactions made are recorded in an open registry, ensuring their traceability.
However, it should be emphasized that such traceability of flows in cryptocurrencies does not allow responding to concerns about the knowledge of the payer and the beneficial owner. In addition, on the one hand, this traceability is neither definite nor systematic – (some cryptocurrencies combine anonymity and non-traceability, some tools and applications allow you to combine and mix transactions with others …) – and on the other hand, the ability to track transactions , both from a technical and legal point of view, is not provided.
Extraterritoriality: the use of virtual currencies allows, thanks to the Internet, to dematerialize, anonymize and increase the scale of traditional methods of laundering and fraud. The difficulties created by virtual currencies are related both to the elusive character of the actors and to the international (and even more extraterritorial) context of facts and protagonists, especially when the servers and individuals or legal entities that use them are installed in countries and territories. territories whose cooperation is difficult to count on.
E-currency accounts. Virtual currencies can be used to make transactions on the Internet, but can also be spent in the real economy with merchants who accept them. Proponents of virtual currencies most often highlight low transaction costs, speed and irreversibility, as well as the possibility of protection against identity theft. Thus, micropayments, purchases abroad without exchange are possible.
It should be emphasized that the question of the cost of the payment method should be considered depending on the level of security and the offered guarantee. Examples of risks associated with this use: – Compensation for virtual currency is not guaranteed and its convertibility in legal tender currency also. Risks associated with price volatility are also important; – Since virtual currencies are not legal tender, settlements with these currencies are null and void. The consumer should be warned that payment in virtual currency on sites for which he is not sure of reliability is a very high risk. This is equivalent to giving cash to a stranger on the street for a product that he agrees to return to you later; – there is no consumer protection scheme adapted to virtual currencies; – Virtual currencies are not covered by the European Payment Services Directive and, therefore, do not provide any protection against fraud contrary to traditional payment methods. The security of these new payment methods is not guaranteed.
Webmoney funds transfer. The technical and functional infrastructure for the circulation of non-regulated units of virtual currency can be used to transfer funds at a lower cost than the banking network or international money transfer companies.
In addition to speculative buying and reselling of virtual currencies carried out by individuals, initiatives to develop investment products indexed at the price of bitcoins appeared abroad. Thus, it is possible to place funds in investment environments related to virtual currencies. Funds develop investment strategies focused on virtual currencies and their ecosystem.
Funds or financial products may be exposed to the risks inherent in virtual currencies: a Contract for Difference (CFD) is already available to the public. Examples of risks associated with this use: – Virtual currency exchange platforms have consequences for users, which, inter alia, are associated with a lack of transparency in the execution of orders, lack of transparency in pricing (asymmetry of information) and the risk of market manipulation. These OTC and anonymous transactions on the Internet are not compensated, and the market lacks depth; – There is a risk of regulatory arbitrage, as some players may place their activities in less favorable offshore financial centers.