Slashdot Mirror
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.)
Who cares so long as it's only end users that suffer?
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.
Indeed. Pick your poison.
If you want a decentralized, unregulated currency, then you don't get a FDIC promise when your bank vanishes overnight.
I understand why some currency is transitory on these sites, but why are people using online wallets beyond coins in motion (escrow or pending transaction, etc.)?
The only pattern is stupid people losing their money. The last time it was sketchy investments that only a complete idiot would fall for. There's no stopping stupid people from being stupid. Without stupid people, the tiny exchange that is obviously Chinese run and thus obviously a scam would have zero customers.
Everybody who trades at the stock exchange through an intermediary, for example.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
Wasnt the whole point that people wanted an unregulated currency with no government involvement?
Whats that old saying? "Be careful what you wish for."
Oh, ooh, I know this one! The difference is that a fly-by-night website will be taking credit card orders, and you can get a chargeback through your credit card bank when they don't show up with the merchandise.
In this case the "bank" is the robbers. This is very different from your typical heist.
His point is that he has a marginally different impression of the role of government than what appears to be the default in his country, therefor every act of that government is clearly tyranny.
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.
Oh the naivety.
Perhaps you've heard of Barclays, USB, or Goldman Sachs.
You haven't read much news lately, have you?
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
The really stupid thing is that such an "exchange" does not offer "sketchy investments". The "sketchy investment" is the actual Bitcoin. I've seen no sites offer actual interest or anything: they just offer to keep your Bitcoins. And that's profoundly stupid since a Bitcoin wallet is just a private key, all the rest is the public bitcoin chain. There is no point in keeping your wallet anywhere but on your own computer. Or on external storage media. I don't get people who use web services to keep a Bitcoin wallet: that's totally missing the point of what Bitcoins are.
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.
"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.