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Chinese Bitcoin Exchange Vanishes, Taking £2.5m of Coins With It
An anonymous reader writes "A Chinese Bitcoin exchange has vanished without trace, taking more than $4 million of the virtual currency with it and leaving profit-hungry investors out of pocket. GBL, the Chinese Bitcoin exchange was launched in May 2013 and putatively based in Hong Kong, despite its servers being registered in Beijing. However GBL's Hong Kong offices do not exist. GBL mysteriously disappeared in early November taking an estimated $4.1m (£2.6m) of Bitcoins with it." (Beware the auto-playing ads, with sound.)
Yes. Sad Trombone.
I am assuming it is only a minority of exchanges, but doesn't this seem to be a bit of a recurring problem?
Why not just follow the bitcoin trail? Perhaps call the local authorities and ask them for help?
>.>
Actually, I do feel sorry... Just had to say it.
It's just another isolated incident. BTC is still safe and legit.
Stockpiling for black ops funding.
Another exchange bites the dust, millions lost!
BitCoin has some *serious* problems, mostly caused by not being officially sanctioned currency that is regulated... But then, that's it's strong point too. But, being a pirate has it's down days. So, if you sleep with dogs, you wake up with fleas (or in this case, w/o your BitCoin. ..
Oh the humanity... Yawn.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
It wasn't me!
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
Bitcoin was advertized as the virtual currency NOT stored in one place with NO detrimental reliances upon any ONE server, person or gov't. WTF?
Autoplaying ads with sound? No thanks, the summary will have to do.
This disappearing-with-all-the-funds is becoming SOP for exchanges.
BitCoins are not incompatible with a normal regulatory and law enforcement apparatus that might prevent some of this. That said, due to their extreme utility for money laundering, tax avoidance, etc. I'm pretty sure they'd rather the things disappear and therefore may direct law-enforcement resources elsewhere in the case of a BitCoin theft.
What idiot stores their cash in somebody else's wallet with no guarantee of that somebody's legitimacy and no insurance? Maybe these morons will have finally learned their lesson, and will keep their cash in their own wallets in their own pockets.
For those curious, there are currently 12 million bitcoin in existence, with a net value of about $4.3 billion.
Source: http://coinmarketcap.com/
It's the 1% who spoil it for the rest of the honest people.
And actually, it goes deeper than that. A capitlaist system requires trust. Rules and regulations build trust into the system. Without these rules and regulations you don't have capitalism, you have a Wild West financial system that no one would invest a dime in except suckers.
who stands to lose the most in the long run if Bitcoin takes hold and really gets a large strong userbase, the established central banks that print state currency like the Federal Reserve, i am sure the People's Republic of China has their own central bank too, these central banks are more than likely wanting to kill Bitcoin more than some gang of criminals
Politics is Treachery, Religion is Brainwashing
...your chicks for free.
I really don't get all you people who think a currency based on internet vapors is worth a bucket of warm spit.
In a real market, no matter how dysfunctional, people want to make money - so stuff like this causes the value of whatever is being traded to go down.
But the biggest bitcoin enthusiasts are just a little religious, so they'll go frantically buying bitcoins to raise the value to prove this isn't really a big deal.
Almost like it's all a scam trying to pretend that TANSTAAFL doesn't apply and that you can really generate wealth with only speculation and no production.
The title quotes GBP, The Exchange is Chinese, and the summary gives USD/GBP.
Shouldn't it be RMB for the title and then a USD translation in the summary?
I clicked the link to the article but I didn't see any flash advertisements that play sounds? oh well
I don't need to beware the ads, since I don't bother to RTFA! Or the summary all that much.
"Little does he know, but there is no 'I' in 'Idiot'!"
All the ISK scams that went on in EVE Online are now here in "real" world Bitcoins. In fact, you can probably predict the next scandal from what dirty deeds were done before.
But it it just me wondering if those involved think the punishment in the real world will be the same (none) ? I can imagine people being a little bit more upset after losing millions in real cash as opposed to losing some in-game fantasy currency.
...and people wonder why I call it shitcoin.
the TFA's talking about Bitcoin it should be using values denoted in BTC (or XBT?...) and providing current conversions into the local currency of WTF the intended audience is.
It was not that long ago that banks generally were subject to little or no regulation. Banks would fail, investors would lose all, only for the process to repeat itself again, and again. Eventually, in an effort to protect their economies, governments stepped to limit the risks that banks could take with their investors' money and, often, to insure the investors against loss, thereby engendering confidence.
Bitcoin has made its stock in trade the fact that it is unregulated by anything but a few algorithms. Like Adam Smith'e "invisible hand", we are to trust to these algorithms to provide a certain Deus ex Machina for providing security.
The reality is that until Bitcoin exchanges are regulated by credible authorities, security will be a fantasm.
New Economy! End of Brick-and-Mortar!
If a bitcoin (or fractional BC) whose last known legitimate transaction's block-chain information is known, can it be blacklisted so any attempt to spend it will raise alarms?
This feature not be in the current Bitcoin software but it seems like something that could be added to a future version of the software if those who use BC demand it.
The devil will of course be in the details - would theft reports be authenticated by One True Central Authority, or would it be up to each BitCoin user to decide what theft-report-authenticating services it trusts (much like how email server owners decide what spam-blackhole-list providers to trust)? What about libel/slander if someone maliciously reports theft of a BC he legitimately spent or if a theft-report-authenticating service erroneously reports a BC as stolen?
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
For individuals who hold BC "on deposit" for long periods of time, a "freeze list" can be developed.
1) I have a BC in a wallet I control that I don't plan on spending any time soon. I place its last transaction on a "freeze list." This tells the world "don't accept the coin until I take it off the list."
2) I have an BC that I am about to deposit with a particular online "bank". I place its last pre-deposit transaction on a "freeze after 1 transaction" list and include the address that I am transferring it to along with a reasonable timeout (say, 1 hour). This tells the world "if you aren't this address, don't accept the BC." If the transaction doesn't happen by the timeout, it reverts to a user-specified fallback action, such as "cancel request" or "covert to a #1-type freeze" or "email me and extend deadline by 1 hour" etc.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
I just know they will recover. There might be 'Billions' of dollars worth of bitcoins out there, but truly believe they will become worth almost zero in the long run.
(If at first you don't succeed, do it different next time!)
Lately, there has been a lot of chatter on the interwebs from Nerdcoin advocates and zealots like, "Oh, the Chinese are getting involved with Bitcoin now. That proves it's to be taken serious." Ha ha ha. Stupid motherfuckers. (Shitcoin worshipers, not the Chinese)
This is like all the people that get mad when paypal jerks them around. Don't use a non banking entity as a bank. There is huge history reinforced reasons why the industry is regulated.
So you put MILLIONS of dollars of value into a computer program which is explicitly OUTSIDE of government control, regulation, inspection, validation and explicitly run by completely anonymous (and hidden) individuals - and then you're surprised when the anonymous people holding your money disappear with it?
Seriously ... what did you think was going to happen? You thought that somehow bitcoin was run by magical, philanthropic leprechauns who were going to provide these services just because they like to see people smile?
Why do you think that every government in the history of man has had rules and oversight over currencies? Because when you don't you might as well throw your money into the toilet and flush. People asked for, and wanted, oversight to provide some degree of protection for their money. Sure - the governments are not saints either, but there is at least some recourse and transparency (and hence, accountability). It is a heck of a lot better than throwing my money into the street and waiting for a black van with tinted windows to "hold" it for me...
Grandpa was incorrect. If you wish to purchase pussy, $20 bills are the preferred form of payment. Though, I did notice some backpage ads listing 290 roses / hour.
I'm shocked, *SHOCKED* to find criminal activity happening in this unregulated currency exchange!
XML is a known as a key material required to create SMD: Software of Mass Destruction
How much do you think Bernard Madoff made vanished?
Scams in the Real Word (TM) happens everyday.
Anyone who has played EVE Online could have told you this was going to happen.
For shame, any self respecting geek has their money in comic books and Pokemon cards. Hizzah!
Well, there's spam egg sausage and spam, that's not got much spam in it.
I'm over 40 so it's real estate.... just not in the U.S.
XML is a known as a key material required to create SMD: Software of Mass Destruction
now that there is a pile to steal, we see exchanges disappearing. I detect a pattern. the Con part of BiteCon is underway.
if this is supposed to be a new economy, how come they still want my old fashioned money?
It's unregulated and anonymous- a perfect set-up to steal with impunity. Why would a sane/intelligent person have anything to do with bitcoin?
FDIC insures bank's depositors against malefesance by the bank.
Congress & the Treasury Secretary insures banks, but only if you're part of the in crowd like Goldman Sachs, and JP Morgan, and not Bear Stearns/Lehman Bros or thousands of less cool banks. And you don't even have to pay large premiums upfront---dinners, jobs and lobbying is so much cheaper than premiums.
The commissioner of the FDIC during the crisis was pretty strenuously against insuring banks and look what it got her.
Technically?! No, you're being very sloppy with terms (and that's very bad if you're going to say "technically"), which will invariably lead to errors, such as talking about your car's speed in grams per lumen, or getting seats with centimeter-colored apolstery, or buying fuel at a price of 3 pixels per ampere.
A unit of currency is valued as or representative of the work someone puts in.
A currency is used as a form of bartering.
And how (or if) the currency is "backed" is a whole other thing. The backing of the currency has to do with your estimate of what forces are used to keep the value of its units from changing (or in the modern era, to keep its units from changing at "too high" of a rate), and what forces exist to make the currency be accepted by others.
Those forces can take a variety of forms. One really simple force that most people understand, is anti-counterfeiting law.
Another force that almost everyone knows about, but perhaps not really consciously, is the social agreement that we'll take the currency. (If you're in the US, someone who doesn't take dollars would be viewed as a weirdo, and shunned.) Related to that, there might even be further laws (e.g. the government declaring "this is legal tender") and agreeing (not just socially, but legally) that they will accept the currency for payment of debts to them, probably even exclusively. (e.g. you can (and must) use dollars to pay your US taxes.)
Bitcoin is backed completely by a social agreement (the current blockchain policy, because it's believed to be very hard to counterfeit) and has no government yet providing additional forceful backing.
What do you expect when the main reason for Bitcoin is to be able to perform illegal acts?
Duh? No sympathy for fools, horses, criminals, and soon-to-be criminals.
Well sure, what good will Bitcoins do you after the heat-death of the universe? At least you can eat tulip bulbs and baseball cards, though opinions are mixed as to which tastes worse.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
If I put up a "BANK" sign and started collecting money from people on the street, and then disappeared with the vault one night,
Then your name is Ponzi.
Steve Stites
Well, you don't want a currency with a government supporting it, so don't expect any
government to cry for you. Losers.
I've never heard of GBL.
The big Chinese exchange is BTC China.
[-- Trust the Monkey --]
Historically, the FDIC pays insured deposits within a few days after a bank closes, usually the next business day.
I come here for the love
"Take the money and disappear" is normal behavior for Bitcoin exchanges. Sometimes they just disappear, sometimes they get broken into and robbed, and sometimes you're not sure whether the robbery was an inside job.
The list of failed Bitcoin exchanges is long. Bitcash.cz just closed yesterday. There's an academic paper with a list. 18 of the 40 exchanges on the list had failed. But that was last January. Since then, Bitfloor and Bitme shut down, and Intersango and Mt. Gox stopped paying out customer funds on demand.
Not one Bitcoin exchange is a bank or a registered broker/dealer in its home jurisdiction. That's part of the problem.
This is why anarchy sucks. What anarchy looks like is Somalia, not L. Neil Smith fiction.
"(Beware the auto-playing ads, with sound.)"
Learn to use Firefox and Adblock plus to kill ads like that.
If the guy who you bought the BC from is accusing you of stealing it, you can sue him for slander. That's a preponderence-of-the-evidence case, so you don't need "proof" you just need a stronger case that you didn't steal it than he has that you did.
Now, if the prosecution wants to go after him for filing a false police report, they will have to prove "beyond a reasonable doubt."
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
I never invested in / used Bitcoins, because its either "value generated out of nothing" or . . . "some giant scheme by the NSA to convince us to crack encryption keys for them". Paranoia=Off
But to my noob question . . . if one of the benefits of Bitcoin is that . . . there is a complete transaction list for every Bitcoin, distributed everywhere . . . then why should I care if my Bitcoin bank went out of business . . . doesn't every other Bitcoin holder in the universe already have the proof that I own . . . what I own?
If I can cough up the Private Key (excuse my poor understanding of the concepts here) to match the records "everyone else" already has . . . how did the bank "take" anything from me?
For that matter . . . why are there even banks?
Bitcoin always sounded like "everyone has a copy of everyone else's balanced checkbook" . . . so, why can't I just continue to use my private key to make purchases?
No, I don't remember your name. But the memory mapped screen on a TRS80 from 1977 is from 15360 to 16383 if that helps.
If you don't have your money in your possession, and it isn't a tangible commodity currency, it isn't really your money.
Money is that which is accepted at government pay offices.
-- Georg Friedrich Knapp
So they are turning to another type of bit farm. They've been farming MMO's for years, not much of a difference I can see here.
So you bought in to bitcoin. Ah, ha, ha, ha, ha!!! Idiots.
My karma is bad. Don't get too close!!!