EU regulator warns on dangers of Bitcoin

The top banking watchdog in Europe has issued a strong warning about the risks of Bitcoin and may consider regulating virtual currencies as their global popularity grows.

In a report out Friday the European Banking Authority warned consumers that any investment in Bitcoin could become worthless, cautioning that digital currencies are completely unregulated, leaving people unprotected if they trade on platforms that crash or go out of business.

It comes as heavyweight investors, tech gurus and everyday consumers clamor to boost their bitcoin holdings on the hope it will one day become a legitimate global currency.

The crypto-currency has soared in value this year -- from roughly $13 in January to peak above $1,200 -- and traded at $921 on the Mt.Gox exchange on Friday. The currency is prone to severe price volatility.