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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.)
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.)?
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.
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?
"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.