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Bitcoin exchange MyCoin has closed its doors, potentially leaving up to 3,000 investors out of pocket.
The closure of the Bitcoin exchange was originally reported by the South China Morning Post on Monday. MyCoin, a supposed Hong Kong-based virtual currency trading exchange, has reportedly closed its doors leaving as many as 3,000 local investors with combined losses of HK$3 billion ($387 million).
Approximately 30 MyCoin clients are filing reports with local police that MyCoin was less of a Bitcoin exchange and more like a pyramid-style Ponzi scheme.
MyCoin customers were promised up to HK$1 million as a return on their money in four months for buying a HK$400,000 Bitcoin contract. The contract, which was meant to produce 90 bitcoins on maturity, also encouraged clients to lure others to the fold with new customer recruitment rewards such as extra profit, prizes and cars.
No customer was given written proof of their investment, and in December, MyCoin changed its trading rules -- forbidding clients from withdrawing their virtual currency unless they recruited other customers.
An 81-year-old woman surnamed Chan said she recovered only HK$1.2 million on her HK$3 million investment on seven bitcoin contracts. “I shouldn’t have been greedy. I was told by my real estate agent that the profit would be over HK$2 million after one year,” she said. The biggest loss by a single client was said to be HK$50 million, while some mortgaged their properties to invest.
Hong Kong exchange, KBBEX, informed Leung that it would provide assistance to help those affected by the situation in order to regain trust in bitcoin and perhaps perfect technical analysis if required. Victims of MyCoin are set to make a statement to Hong Kong police on Wednesday (February 11th).
originally posted by: Aliensun
a reply to: Semicollegiate
We can bank on that I assume because we have your word on it?
No customer was given written proof of their investment, and in December, MyCoin changed its trading rules -- forbidding clients from withdrawing their virtual currency unless they recruited other customers.
First who would invest heavily with no written proof of their investment?
originally posted by: samkent
Bernie Madoff sent out written proof 4 times a year.
What more could you want ???
originally posted by: Crakeur
How many times does it have to be said? Virtual currency, that is not regulated, is rife for scams, ripoffs and other tomfoolery.
If you can't hold it, touch it or see it, it can vanish from your possession without you ever knowing.