British MPs have been assured by the country’s Bitcoin website operators that consumers’ crypto assets are secure after security concerns were raised by members of a parliamentary committee.
CryptoUK Answers MPs Questions
The concerns follow the recent hack at South Korean crypto exchange Bithumb, reported on yesterday. According to the report, thieves were able to steal $32 million in cryptocurrencies after the exchange changed its wallet service. A source from the report believes that the crypto assets were stored in hot wallets, making them more susceptible to hacking attempts. Bithumb has said that it will reimburse customers’ lost assets.
However, CryptoUK, the self-regulatory body that represents many of the websites were digital currencies can be bought and sold, answered concerns raised by MPs on the U.K.’s Treasury Select Committee. Iqbal Gandham, the chairman of CryptoUK, explained that it required 90 percent of crypto assets to be stored in cold wallets, reports The Telegraph. He added:
Security is improving.
A few of the members committed to upholding CryptoUK’s Principles and Code of Conduct include trading platform eToro, San Francisco-based crypto exchange Coinbase, and London-based Bitcoin exchange Coinfloor. Set up in February, CryptoUK is aiming to boost confidence in the cryptocurrency world.
However, while security remains a concern, Gandham said that uncertainty over regulation was seeing banks avoid online exchanges. As a result, websites were being forced to look elsewhere to provide a service, adding:
99.9pc [of exchanges] have bank accounts in far-flung jurisdictions, and U.K. consumers are sending their money to high-risk jurisdictions.
Crypto Assets Present Risks
Since the arrival of the crypto market, naysayers have spoken out against it. One of the more popular arguments is that crypto assets are used by criminals. Yet, so too can money. That, though, that doesn’t seem to be relevant when it comes to cryptocurrencies.
The Governor of Spain’s central bank is one such individual who has voiced his opinion on cryptocurrencies. In May, Luis María Linde expressed the view that they present “more risks than benefits.” Whereas, the founder of Hotmail, Sabeer Bhatia, said that the crypto market was “too good to be true.” Clearly, a statement that many wouldn’t agree with.
The cryptocurrency market may present risks, but so can the use of physical money. There is no guarantee that anything will be safe. That is not to say that measures aren’t in place to prevent hacks from happening. What happened at Bithumb could have been avoided, but it is through these types of incidents that improvements can be made. Only time will tell to see how the market recovers.
Do you think MPs have cause for concern? Let us know in the comments below.
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