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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.
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.
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.
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.
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.
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.
Wasnt the whole point that people wanted an unregulated currency with no government involvement?
Whats that old saying? "Be careful what you wish for."
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?
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
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.
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.