MPS seeking protection for cryptocurrency hack victims
CRYPTOCURRENCY investors who have their e-wallets stolen by cyber hackers should be entitled to compensation, the Treasury select committee has said.
Such a move would give money invested in Bitcoin and other cryptocurrencies similar levels of protection as cash held in bank accounts or invested in the stock market.
It is thought that the governmentrun Financial Services Compensation Scheme, which pays out to people if banks or financial institutions go bust, could be extended to cryptocurrencies to give investors more protection.
It comes after a number of cryptoasset exchanges, which are used to convert crypto-assets into conventional currency, have been hacked, leading to customers’ crypto-assets being stolen. At present, there is no formal scheme to compensate investors in the event of a hack, meaning they could lose all their money.
Nicky Morgan, the committee chairman, said: “Bitcoin and other cryptoassets exist in the Wild West industry of crypto-assets. This unregulated industry leaves investors facing numerous risks. Given the high price volatility, the hacking vulnerability of exchanges and potential money-laundering, the committee believes that regulation should be introduced.
“It’s unsustainable for the Government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting.”
The Treasury set up the joint Cryptoassets Taskforce earlier this year.