Millions feared missing in alleged Bitcoin scam

Feb 09, 2015

Investors in a Hong Kong-based Bitcoin trading company fear they have fallen victim to a scam after it closed down, a lawmaker said Monday, adding losses could total HK$3 billion ($387 million).

Investors in a Hong Kong-based Bitcoin trading company fear they have fallen victim to a scam after it closed down, a lawmaker said Monday, adding losses could total HK$3 billion ($387 million).

Leung Yiu-chung said his office recently received reports from dozens of investors in Hong Kong who paid a total of HK$40 million ($5.16 million) into the scheme run online by MyCoin, but the total loss may be vastly more.

"The number of cases is increasing. These two days I received calls about more than 30 cases. We estimate more than 3,000 people and HK$3 billion are involved," he told AFP.

One investor said she spent HK$1.3 million in swap options for the virtual currency last September.

She said salespersons had told her she would recoup her investment in four months and make around 200-300 percent profit in one year.

The cryptocurrency was created in 2009 by a computer algorithm designed by one or more anonymous people.

It has since become a form of e-money that offers a largely anonymous payment system and can be stored either virtually or on a user's hard drive.

But its development has been marred by concerns about links to illegal activities and a lack of oversight.

Tokyo-based MtGox, one of the longest-established Bitcoin exchanges, collapsed due to a suspected theft worth nearly half a billion dollars.

The value of a Bitcoin, which soared to over $1,200 in 2013, was around $285 in January.