Public warned against dangers of bitcoin

PUBLISHED : Wednesday, 18 December, 2013, 5:13pm
UPDATED : Wednesday, 18 December, 2013, 7:54pm

The Secretary for Financial Services and the Treasury has warned the public against the potential dangers of bitcoin, saying it is highly unstable.

“Bitcoin is not an electronic currency, nor is it an e-wallet (like the Octopus card). Its price is highly unstable,” Secretary for Financial Services and the Treasury Professor Chan Ka-keung told lawmakers on Wednesday. “It is not qualified to be used as an electronic currency. Citizens should beware of it.”

Following the announcement by Cheap that it now accepts bitcoin as a method of payment for flights, IT sector lawmaker Charles Mok suggested the government look into the potential of bitcoin.

Chan, however, was not convinced that potential existed.

“It is not appropriate to use bitcoin for settling payments. The risks are very high,” he replied. “The government will continue to monitor its development and step up regulation if necessary.”

In the same Legislative Council meeting, Chan noted a growing trend of lawbreakers making use of the internet to defraud customers and financial institutions.

The Securities and Futures Commission received 10 reports concerning fraudulent securities company websites in 2011, 13 last year and 17 in the first 11 months of this year.

The Hong Kong Monetary Authority received 25 reports involving fraudulent bank websites received in 2011, 26 last year and 19 in the first 11 months of this year.