HOUSTON, March 11 A state securities regulator
has ordered an exploration and production company to stop
accepting bitcoins as payment for investments in its Texas oil
Texas Securities Commissioner John Morgan entered an
emergency order on Monday against tiny Balanced Energy LLC,
which claimed it was the first energy company to accept the
virtual currency, according to the regulator.
"The price of digital currency is subject to extreme swings,
which could affect the amount of money available for business
operations," the regulator said in a statement.
Bitcoin is a digital currency that, unlike conventional
money, is bought and sold on a peer-to-peer network that lacks
central control. Its value has soared in the last year, and the
total worth of bit coins minted is now about $7 billion.
Balanced Energy, based in the Dallas area, has drilled 33
wells on 10,500 acres in central Texas. According to the order,
Balanced Energy is offering a stake in two exploration projects
for about $31,000.
Executives at Balanced Energy were not immediately available
Also on Tuesday, the Financial Industry Regulatory Authority
(FINRA) said recent events such as the bankruptcy of bitcoin
exchange operator Mt. Gox have spotlighted some of the
currency's risks. The brokerage industry watchdog group produced
an investor alert titled "Bitcoin: More than a Bit Risky,"
warning that bitcoin can expose people to significant losses,
fraud and theft.