MyCoin Reportedly Goes Bust, Loses Up to HK$3 billion Customer Funds

Hong Kong-based Bitcoin trading and investment outfit MyCoin.hk has allegedly entered sudden bankruptcy, reportedly losing customers up to HK$3 billion (US$386.9 million) in bitcoins.

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MyCoin Reportedly Goes Bust, Loses Up to HK$3 billion Customer Funds

Hong Kong-based Bitcoin trading and investment outfit MyCoin.hk has allegedly entered sudden bankruptcy, reportedly losing customers up to HK$3 billion (US$386.9 million) in bitcoins.

The South China Morning Post estimates that as many as 3,000 private users may be implicated in the losses, with pyramid scheme accusations coming from both consumers and lawmakers. The exact amount of lost funds remains at large, however, with the reported estimate, almost a tenth of Bitcoin's total market cap, seeming unlikely.

“No one seems to know who is behind this,” user Lau, who originally invested HK$1.3 million in four Bitcoin contracts, told the publication. “Everyone says they too are victims … but we were told by those at higher tiers [of the scheme] that we can get our money back if we find more new clients.”

MyCoin was seemingly above suspicion at the height of its popularity in summer 2014, featuring a professional online presence, as well as events at “luxury hotels” and guest appearances from figures such as Jim Rogers.

However, investors only received an online account upon submission of their Bitcoin, with no proof of payment and no verifiable information regarding refunds or plausible safety nets. In December, MyCoin began prohibiting full account withdrawals unless further investors were found. Payouts have recently become uncompetitive, the company valuing each bitcoin at HK$20 against an international value of HK$1,770 as of February 8. The largest single investment is considered to be HK$50 million.

“I was told by my real estate agent that the profit would be over HK$2 million after one year,” another investor told the SCMP regarding an HK$ 1.8-million loss over seven contracts, adding that she “shouldn’t have been so greedy.”

MyCoin has yet to comment on the situation, while local media are already carrying admonishments regarding the unpredictability of such investment schemes and even Bitcoin itself.

MyCoin

Senior accounting and finance professor at the Chinese University Simon Lee told local network Radio Televison Hong Kong that the government “should ban Bitcoin” under its jurisdiction in the wake of the MyCoin scandal.

Nonetheless, suspicions are rife within the cryptocurrency community that the reports are not legitimate, and that the amounts involved have been overstated. The most popular consensus on Reddit regarding the news follows the sentiment of user u/revman, who considers the SCMP article to have already been “completely discredited.” A link to a similar Bitcointalk forum post is included, but as yet no substantive evidence has been publicized relating to either theory.

The news follows the loss last month by Chinese exchange 796 of around 1,000BTC, and is the second revelation to hit the local Bitcoin scene this year. 


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