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.)
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.
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
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.
Since I'm entertaining myself with conspiracy theories today, here's one I just completely made up: what if government funds illicit operations by just changing a figure in a bank database to give itself more money to spend? Like QE (i.e. that money-printing thing everyone hates), but only for itself, and on a smaller scale.
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
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.
...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.
Swap "internet vapors" with "vague promises by lying bureaucrats" and you've aptly described the US Dollar.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Should be the same for any fiat currency, not just the Dollar. How many world currencies are backed by anything with intrinsic value?
In C++, your friends can see your privates.
My dollar isn't just backed by lying bureaucrats. It's backed up by people with guns--big guns. And don't you forget it!
Then I doubt the US government would be in billions/trillions/whatever of debt.. they already have more than enough money from taxes - they just use it poorly.
which is totally what she said
What do people expect when they hand over money to someone, especially when the money isn't regulated and is being held by an unregulated company.
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.
Shsssss.... Be quiet! It's all about perceived value and you are causing a problem here!
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
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.
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.
Wasnt the whole point that people wanted an unregulated currency with no government involvement?
Whats that old saying? "Be careful what you wish for."
Government routinely confiscates your property through money printing, new taxes, and, well, outright confiscation like gold under Roosevelt.
This has been tried before. IIRC debasement of money goes back at least to 1,000 B.C.E. Few have pulled it off successfully.
This creates money which if in excess for demand of money causes inflation. There is a casual link between demand for money and GNP.
The second reason is that the international bond market fears it will be paid with worthless currency in the future. The country’s currency is devalued. Interest rates on new debt go up. Bondholders demand payment is a sound currency. Etc.
Generally the long run consequences are worse than the immediate gain. You can take a look at what Argentina’s government has been doing for the past 30 years for a full spectrum of choices and results. This is why, generally speaking, a independent central bank handles money creation instead of the politicians – they are tempted by the short term gain.
They also routinely give you things "for free" like roads, healthcare, and a legal system. What's your point?
No kidding!!! What do you say at this point?
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!)
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.
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
But work is not something that has intrinsic value, like, say, gold or silver. U.S. currency was backed by precious metals up until the Nixon administration when we were taken off the gold standard... Once upon a time, you could take your paper money to a bank and demand the equivalent amount in gold and/or silver. Once the instrument is backed by faith, it becomes a fiat currency.
In C++, your friends can see your privates.
I use bitcoin rather frequently and I've never run into this kind of problem.
Of course, I also always keep my bitcoins in my own wallet and don't leave them sitting in random escrow pools. There is only one place I've done business with using bitcoins that has run off like this, however at the time they left I had zero in my account, and I never had amounts larger than a few mBTC for any period longer than a day either (just long enough to complete whatever transaction I was about to do) and once I was finished I would remove the remainder back into my own wallet.
This isn't anything unique to bitcoins by the way, similar scams have happened with stock traders running off with people's money.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
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 logged in just to answer this knee-jerk reaction that i see so often pretty much where I am: at the workplace, with friends etc. Assuming we are not talking Anarchism (which we are hopefully not):
/entities that deliberately conceal information may be sued for fraud. Individuals are NOT exempt from this obligation of a FREE society.
1. A regulated currency does not protect from theft.
2. You are implying that because of Free-Market ideas or rules and regulations, we as a society should not follow and punish theft. This idea is so false I really hope I don't have to underline the obvious, or do i?
The customer should be free and invest in whatever place and idea he chooses to. Being the Wild West in currency terms as it is, Bitcoin exchanges are notoriously unsafe. This fact is and the associated risks/rewards are also known. Why do you want to interfere?
And to your point - The Government in a Liberal (European perspective) - Libertarian (American one) has the RIGHT and is EXPECTED TO provide courts of LAW in which corporation
May I ask you, in this big government orgy that protects us from theft, how much time has the HSBC management have done? Than at least i will take the small government, thank you.And why do some people always leave out the part where the desired small government is not a weak government?
And yes, that is as a Liberal (as I live in Europe) what I wish for.
I take my children to see Madonna(..), but I never for once ever thought I was in the same business.Chris Rea.
Eh? There's nothing religious about it. It just is. Can you store work in your safe when the shit hits the you-know-what?
In C++, your friends can see your privates.
Wasnt the whole point that people wanted an unregulated currency with no government involvement?
Bitcoin has many points (see bitcoin.org) and this was never one of them. One of the many purposes of bitcoin is to have currency without central authority which could cause monetary inflation at will, but that in no way means that bitcoin should stay completely outside of any government influence and bitcoins thefts should be ignored by law enforcement.
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
Swap "internet vapors" with "vague promises by lying bureaucrats" and you've aptly described the US Dollar.
And yet billions of people successfully use the US Dollar every day to complete transactions, and it remains the world's most popular and useful currency. Inexplicable!
I don't care if it's 90,000 hectares. That lake was not my doing.
Swap "internet vapors" with "vague promises by lying bureaucrats" and you've aptly described the US Dollar.
And yet billions of people successfully use the US Dollar every day to complete transactions, and it remains the world's most popular and useful currency. Inexplicable!
You can thank the largest military force the world has ever seen (and the handful of powerful oligarchs who use said military to maintain global monopolies on banking and oil sales) for that.
So, less inexplicable, and more despicable.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
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?
Yes, that is about the age of the oldest physical coin. However, the Code of Hammurabi, which dates back to 1750 BCE, includes sections on money, loans, and debt forgiveness. So debasement could have occurred back then.
I have limited time and my books are at home so I can’t dig up the example that I am thinking about, but it was during accident Babylonian, Sumerian, or somewhere in that time era. The king needed more money so he recalled all of the coinage in his empire, made possession of the old currency illegal and reissued debased currency.
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.
Actually it's possible. The Federal Reserve is the checking account for the US Government (I mean in a literal sense, the Fed provides cash management & accounts for US Departments). The 'black budget' is not disclosed and it's not clear anybody in the Fed has the clearance to know about it. A man in sunglasses could order some clerk at the Fed to insert a certain number in a certain account and that's it. The Fed doesn't report the deficit, the Treasury department does and it works for the President.
At a minimum, CIA regularly gets substantial amount of physical US currency for its overseas operations. What's the bank for that?
What do people expect when they hand over money to someone, especially when the money isn't regulated and is being held by an unregulated company.
Paypal?
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
bitcoins aren't money, at best they are coupons taken by some stores. you can only sell them as long as their is a buyer
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
Except that the U.S. Government has lots of assets to back up those "vague promise" including but not limited to guns, ships, planes, tanks, bombs, oil, land, vehicles, gold, platinum, diamonds, uranium, plutonium, research installations, etc. On top of those assets, it also has the ability to collect taxes from the populace.
What does bitcoin have to back it up? Oh, yeah, "internet vapors".
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
So... if US debtors call in what we owe, they can be paid in missiles and tanks?
Just kidding, I know what you're getting at; see my earlier reply to another poster who said basically the same thing you just did.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
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
So the same as euros and US dollars then?
Well, technically, yes, they could. They could also sell the tanks and missiles to the highest bidder. Or, say, "Come and get it, if you can." Just think about what the U.S. could get for the strategic oil reserve or the various national parks. The U.S. government could possibly even sell U.S. territories in various parts of the world to other countries. The U.S. government has many assets and resources with which to back up the dollar.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
And how does that work you have backing the currency prevent the government from say increasing the money supply by a factor of 10,000 without a corresponding increase in "work"?
Hint: it doesn't and hence that work is not backing up the currency.
A currency backed by gold (or some other commodity) has the same "backed by the work" feature. Almost nobody cares about the actual gold, they care about a medium of exchange (your "abstract form of bartering"). But that gold backing prevents the government from expanding the money supply without a corresponding expansion of their gold stores.
Whether that is a good thing or bad thing depends on whether you trust the government to manage the money supply in a way that benefits the economy and whether you think the amount of gold (or whatever) will be a good match to the size of the economy, but the pros and cons are irrelevant to what "backed by" means when talking about a currency.
not at all, government in the pocket of banking cartel thugs say you have to play their game. its even in the small print on the bill "legal tender for all debts, public and private".
It's not the costs we're trying to dodge, we'll pay tax on the bitcoin we earn, we just don't like the fed having such complete control over the supply of money.
Is 1563649 a prime number?
"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.
as long as their is a buyer
You can't be serious.
CLI paste? paste.pr0.tips!
It doesn't matter if the thief considers it worthless. It only matters if the thief knows other people will pay money for it.
If you steal something the most stupid thing you can do is hold on to it.
It's like stabbing someone them walking around with the blood stained knife hanging around your neck.
That's *precisely* what intrinsic value is. Something is rare, so it has intrinsic value. What, am I taking crazy pills?
In C++, your friends can see your privates.
I think you just made my argument for me.
In C++, your friends can see your privates.
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 can be a serious mispeller
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.
Easy. By busting down the door and confiscating the printing press.
He's not talking about his personal guns. He's talking about the fact that the US government has been using the US military to force the preeminence of dollars globally for over a hundred years. Oil is valued and traded in dollars internationally because of US government guns.
> what if government funds illicit operations by just changing a figure in a bank database to give itself more money to spend?
Why bother with that, when they literally own the printing presses for US currency? Just run the presses a little extra, and divert the cash to whatever illicit operation you want.
In practice, they don't even have to do that. Just have the CIA set up a "civilian contractor" ( http://en.wikipedia.org/wiki/Air_America_(airline) ) who overcharges for services as a way to launder the funds, and the leftovers after actual expenses goes to illicit operations. Secretly owning an airline also makes it easy to deliver agents wherever you want.
These techniques are all more complex than changing a number in a database and require greater complicity, but yeah, why not them too, I guess.
May I ask you, in this big government orgy that protects us from theft, how much time has the HSBC management have done? Than at least i will take the small government, thank you.And why do some people always leave out the part where the desired small government is not a weak government?
HSBC were the best fucking bank I ever used. And I wasn't even laundering money.
In the free world the media isn't government run; the government is media run.
But a store doesn't have to take them for anything but a debt, just like they don't have to take bitcoins. And most transactions don't involve a debt.
For example, the local government run buses over here refuse to take "large notes" - if you try to pay the $1.50 fare with a $20 note you won't be catching that bus. So there's the government not accepting "legal tender" - as you are allowed to do for any non-debt transaction.
Or they could trade cocaine for guns to secretly overthrow a government they don't like... and if they get caught, have some low level patsy take the blame. He'll be ok, he'll just go into talk radio.
-yy1
Because, sometimes they just have to touch the stove.
-YY1
The floor in the demand for certain goods (food, shelter, heat, healthcare) means there is a corresponding minimum possible price, which is what you would call that good's intrinsic value. People need it.
No kidding!!! What do you say at this point?
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.