Cryptocurrency Self-Regulator Assures British Government After Multiple Security Breaches
After reports of the security loopholes in cryptocurrency exchanges, British authorities raised deep-rooted user-safety concerns from using cryptographic forms of money. However, industry-leading websites have come ahead with assurance on the contrary.
Exchanges Committed to Investor Safety
According to Stuff, CryptoUK, a U.K.-based self-regulatory body, assured members of parliament in Britain’s upper house after politicians voiced their concerns for cryptocurrency investors. The organization stated cryptocurrency exchanges, and other related services like wallets, are “committed towards storing at least 90 percent of holdings offline,” to prevent a hacker infiltration.
The concerns come after an attack on Bithumb, the world’s third-largest cryptocurrency exchange by traded volume, on June 20, 2018, which saw attackers steal over $30 million worth of lesser-known altcoins.
In June 2018, Coinrail, an obscure cryptocurrency trading platform, revealed it lost over $40 million in cryptocurrencies after a cyber-attack. The news led to a market shakedown after mainstream media reports on the hack fueled investor panic.
Security remains a paramount issue at cryptocurrency exchanges, as over $670 million worth of cryptocurrencies have gone missing in 2018 after nefarious groups deem exchanges as easy-to-infiltrate targets. As per a report, over $71 million has been stolen in June 2018 alone. If one considers all hacks since 2010, the figure is close to a billion dollars.
Attacks Affecting Investor Confidence?
Reports attribute the pioneer cryptocurrency’s falling price to the slew of attacks taking place. Bitcoin started 2018 at over $17,000 and trades at $6,000 at the time of writing according to data collated from CoinGecko.
Meanwhile, Iqbal Gandham, the founder of CryptoUK, was questioned by British M.P.s at the Treasury select committee. Gandham stated:
“The body requires 90 percent 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.”
Incidentally, Gandham is the managing director of eToro, a trading platform which added cryptocurrencies in 2018. eToro is, unsurprisingly, a part of the CryptoUK consortium, which also features American exchange Coinbase.
The self-regulating body was set up in February 2018 to boost security standards within the digital asset sector, as well as form a centralized point-of-contact for authorities and the public.
Gandham attributes the attacks to an insufficient regulatory framework on cryptocurrencies which forces businesses to work with risky money lenders as major banks shun the asset class.
“99.9 percent [of exchanges] have bank accounts in far-flung jurisdictions and UK consumers are sending their money to high-risk jurisdictions,” stated Gandham, adding “prices are now wavering less than they used to.”