NEW YORK ( MainStreet) — Bitcoin, the beleaguered digital currency, has struggled to gain credibility. Its value will soar one week, only to plummet the next. New vendors will excitedly announce Bitcoin acceptance – as one of the first and largest exchanges crumbles into bankruptcy, leaving investors with empty wallets. The good news/bad news cycle seems unending.

Now, as bitcoin ATMs begin appearing in major cities across America, a securities firm regulator issues an investor warning regarding the cryptocurrency.

The bitcoin ATMs -- with installations so far in Boston and Austin, and soon in Seattle -- allow consumers to buy, sell and convert bitcoin into U.S. dollars. While the online verification of such transactions can take days, the ATMs can process them in a time ranging from minutes at best, to hours at worst.

Meanwhile, Benjamin Lawsky, superintendent of the New York State Department of Financial Services, has announced he will begin issuing "BitLicenses" to establish new digital currency exchanges and provide "rules of the road for reputable virtual currency firms seeking to conduct business on-shore in a responsible manner."

That's the good news. The bad news for Bitcoin buffs comes from FINRA, the U.S. securities firm regulator who has just issued an "Investor Alert" on the peer-to-peer currency.

"FINRA is issuing this alert to caution investors that buying and using digital currency such as bitcoin carry risks," the statement says. "Speculative trading in bitcoins carries significant risk. There is also the risk of fraud related to companies claiming to offer bitcoin payment platforms and other bitcoin-related products and services."

FINRA reminds investors that bitcoins are not issued or backed by banks or governments, and in fact was created as an alternative to traditional national currencies.

"Digital currency such as bitcoin is not legal tender," FINRA warns. "No law requires companies or individuals to accept bitcoins as a form of payment. Instead, bitcoin use is limited to businesses and individuals that are willing to accept bitcoins. If no one accepts bitcoins, bitcoins will become worthless. Platforms that buy and sell bitcoins can be hacked, and some have failed. In addition, like the platforms themselves, digital wallets can be hacked. As a result, consumers can -- and have -- lost money."

The regulator notes that, unlike U.S. banks and credit unions that offer insured deposits, there are no such safeguards provided to digital wallets holding bitcoins.

And because of the anonymity the currency offers, it has been a favored currency for drug dealing, money laundering and other forms of illegal commerce. That means law enforcement agencies could shut down or restrict the use of bitcoin platforms and exchanges, limiting or completely disallowing the ability to access or trade bitcoins, FINRA says.

"Bitcoin speculation is extremely risky," FINRA warns. "Never speculate with money you cannot afford to lose."