MPs call for Bitcoin probe over fraud fears

An inquiry into Bitcoin and other so-called cryptocurrencies could be launched by MPs because of concerns investors risk heavy losses and could be defrauded.

Nicky Morgan, chairman of the Treasury Select Committee, said she would seek evidence from experts on the issue.

Bitcoin, Ether and other virtual currencies have soared in value over the past year, attracting millions of people to buy in. However, experts have warned that prices could collapse as quickly as they have risen, potentially leaving investors with nothing.

Ms Morgan told the Standard: “We are going to look at the whole issue of cryptocurrencies. Clearly there is a concern… the Financial Conduct Authority and the Bank of England have said people need to be very aware that they could lose everything in terms of Bitcoin.

“You don’t want people who can’t afford to get their fingers badly burnt to run into problems.”

What is Bitcoin?

Bitcoin has surged 1,500 per cent in the past year despite having fallen rapidly since December. 

The US financial markets have embraced the currency far more than the City, opening two future Bitcoin exchanges.

Ms Morgan said it was too soon for Britain to follow suit when so many questions remained about its safety and lack of regulation. 

She said: “London should watch that with interest but I think we should take our time to really understand the risks first.” 

But she added: “We don’t want to stamp out innovation. If we’re going to be global Britain, we have to encourage innovation, technology and be at the forefront of all this.”

The former education secretary and Conservative MP has not bought any cryptocurrencies herself yet, but said some of her constituents were fans.

While most City veterans think Bitcoin is a bubble, most say that the technology behind it — known as blockchain — will revolutionise how finances and legal documents are managed.

J P Morgan chief executive Jamie Dimon this week changed his mind on cryptocurrencies, which he described in September as a “fraud”. He said he regretted that comment and added: “The blockchain is real.”

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