British Bitcoin websites have assured MPs that customers’ cryptocurrencies are safe, after members of a parliamentary committee raised concerns following yet another attack on a foreign exchange. CryptoUK, the self-regulatory body that represents several websites where cryptocurrencies can be bought and sold, said exchanges had committed to storing at least 90 per cent of holdings offline, so that they would not be accessed by hackers.

It comes after one of the world’s largest exchanges, the Korean website Bithumb, lost more than £20 million (NZ$38.4m) worth of cryptocurrency in a cyber attack, the latest in a series of security breaches. The attack on Bithumb followed another Korean exchange, Coinrail, which was targeted last week.

Security is an especially sensitive issue at cryptocurrency exchanges because a cyber attack on the Japanese website Mt Gox in 2013 is widely seen as responsible for a price collapse from which it took years to recover. Recent attacks are believed to be one of the reasons for the falling price of Bitcoin and other digital currencies this year.

Bitcoin has slumped in the last month and is now trading at around US$6,700, roughly a third of the peak it reached six months ago. Asked about the recent hacks by MPs on the Treasury select committee, Iqbal Gandham, the chairman of CryptoUK, said the body required 90 per cent of cryptocurrencies to be kept in so-called “cold storage”, meaning that they are stored offline and insulated from remote cyber attacks.

“Security is improving,” he said. CryptoUK includes the trading service eToro, which Gandham runs, as well as Coinbase and Coinfloor, which arranges transactions for businesses. Read more from stuff.co.nz…

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