By Charissa Luci-Atienza
The chairman of the House Committee on Banks and Financial Intermediaries warned the public on Wednesday against investing in bitcoins or any other virtual currency, citing that it is “extremely risky” and that there are no safeguards in place to protect its investors.
Eastern Samar Rep. Ben Evardone said Filipino investors should not put in their savings and retirement funds into bitcoins and other cryptocurrencies, warning that they could lose everything in one drastic plunge.
“Cryptocurrencies like bitcoin are a promising low-cost remittance platform for Filipino workers sending their earnings home but they are extremely risky investments due to lack of regulatory protections for consumers,” he said in a statement.
He noted that bitcoins and other electronic currencies are not backed by a bank, any existing currency unit in circulation, or any asset of tangible value that offer some degree of security for its buyers.
The price of bitcoin, the best known virtual currency currently in use, neared the $10,000 mark this week for an almost 900 percent increase since the start of the year.
“Investors stand to lose everything overnight if exchange platforms for cryptocurrencies shut down or when the consumer’s virtual wallet containing confidential information is hacked or stolen,” Evardone said, noting that the biggest cryptocurrency hacking incident was the Mt. Gox case in Japan where $460 million worth of bitcoins were lost.
Another cryptocurrency, tether, was the subject of the most recent hack early this month resulting in a reported loss of $31 million, he said.
“Until enough safeguards are put in place, investors would be well-advised to heed the admonitions of the Bangko Sentral and the Securities and Exchange Commission to put their money in safer investments,” Evardone said.
He noted that during the House Committee on Banks and Financial Intermediaries hearing on Tuesday, officials from the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), banking community and operators of virtual currency themselves issued a stern warning against investing in bitcoins.
“They were one in advising the public against investing in bitcoin or any other virtual currency.
They said it is very risky, speculative and with no safeguards,” Evardone said.
Tags: Bangko Sentral ng Pilipinas, Ben Evardone, financial intermediaries, investing in bitcoin, Investors, manila bulletin, risky investments, safeguards, virtual currency, Warning issued against investments in bitcoins
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