Bitcoin is generated by computers and is independent of control or backing by any government

UK bitcoin storage firm secures KPMG accreditation

UK firm Elliptic, which stores bitcoins for its financial services clients, has received accreditation from accountants KPMG. Elliptic says that this indicates it operates to the same standards as a custodian bank.

The accreditation from KPMG, one of the so-called 'Big Four' accounting firms, followed a review of its financial controls, regulatory compliance, internal access controls and other areas.

Elliptic is best known for its Vault product, a deep cold-storage service which allows bitcoin holders to store holdings of the digital currency in secure locations offline to shield them from hackers.

"KPMG's accreditation is an important milestone," said James Smith, Elliptic’s chief executive officer. "[It] demonstrates to our customers that we have the rigorous internal processes and controls expected of any traditional financial services provider.”

The accreditation, known formally as the ISAE 3402 Type 1 review, comes after a number of scandals involving bitcoins dented public confidence in the nascent digital currency.

Bitstamp, one of the largest exchanges for bitcoin trading, announced recently that it had suspended its service after a security breach, resulting in the loss of about 19,000 bitcoins.

In February 2014, Mt. Gox, the world's biggest bitcoin exchange at the time, lost 750,000 bitcoins held by its users and 100,000 of its own bitcoins as a result of hacking. According to the bitcoin price at the time, the Mt. Gox losses amounted to approximately $480m, an estimated 7 per cent of the world's total value of bitcoins.

Bitcoin began circulating in 2009. Unlike conventional money, bitcoin is generated by computers and is independent of control or backing by any government. One bitcoin is currently worth $271.77.

Elliptic became the first bitcoin firm to offer an insured storage service in January 2014, an indication that the bitcoin industry was maturing. In July 2014, venture fund Octopus invested £1.2m in the company.

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