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Another Bitcoin Exchange Fraud

Posted by timothy on from the whereas-governments-debase-the-money-instead dept.

Ellie K writes Bitcoin exchange MyCoin has vanished — leaving $387 million in investor funds unaccounted for. MyCoin is a Hong Kong-based virtual currency trading exchange. Bitcoin exchanges are no stranger to controversy. Mt. Gox closed in February 2014, filing for bankruptcy and leaving investors approximately $500 million out of pocket. Others were 'cyberattacked' including Flexcoin, Poloniex and Bitcurex.

7 of 53 comments (clear)

  1. They're all frauds by AuMatar · · Score: 1, Insightful

    Does anyone still think that sending money over an unregulated channel for a dubious commodity is a good idea? There's a good reason banks are one of the most regulated industries on the planet.

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    I still have more fans than freaks. WTF is wrong with you people?
    1. Re:They're all frauds by GerryGilmore · · Score: 1, Insightful

      I would actually challenge the use of the term "dubious commodity". How, pray tell, can the result of some math-hashing scheme be even remotely considered any kind of "commodity" (i.e. something that has some intrisic value)? Totally bizarre that anyone in their halfway-right mind would put something (real American dollars) that does have intrisic value - being "valid tender for all debts public and private" - into something that does not? A fool and his money, brothers and sisters!

    2. Re:They're all frauds by stoploss · · Score: 3, Insightful

      So you are saying guarantee of US laws and belief of bitcoin fans are the same thing?

      You posed the question incorrectly.

      What we're saying is that US laws mandating the value of the USD are only worth as much as people believe. There were laws mandating the value of the Mark in the Weimar Republic. There are laws mandating the value of the Zimbabwean Dollar. Obviously, those laws weren't/aren't sufficient to make people trust the currency and they collapsed.

      Now, asking whether people *should* find the BTC to be as trustworthy as the USD is an appropriate question. The answer to that is obviously "no".

      What we take issue with is the perspective that there is some divine providence conferred on national currencies that make them trustworthy, when clearly there is no such intrinsic property like that.

    3. Re:They're all frauds by gl4ss · · Score: 3, Insightful

      well the thing is that you don't need to keep your bitcoin _in_ the exchange... you only need to transfer it for the transfer.

      if you're banking your bitcoin with the exchange then you're a dolt, even if they pay interest rate on it. if they pay a high interest rate then they're a scam.

      and the process of sending money to the exchanges _is_ regulated like any financial transactions, so you're quite a bit off on that. it's you transferring bitcoin to another bitcoin owner that's the unregulated channel and then you're sending bitcoin..

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      world was created 5 seconds before this post as it is.
    4. Re:They're all frauds by gl4ss · · Score: 2, Insightful

      wtf man?

      paypal is exactly printing their own paypal money by assigning money into paypal accounts. that's how they got people started and hoped that everyone wouldn't cash out at once.

      paypal: can create as much as paypal as it wants - probably doesn't want to create more than it can pay out though.

      paypal isn't only a go between, since you can let your funds sit in a paypal account. it's a bank but bullshited itself out of being a bank so they can grab whatever accounts they want when they feel like it.

      bitcoin exchange: cannot create bitcoins out of thin air as much as they want.

      however here's a top tip: never let your bitcoins sit in an exchange and never let your dollars sit in paypal.

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      world was created 5 seconds before this post as it is.
  2. In The Criminals' Defense by Greyfox · · Score: 3, Insightful

    The investors just keep falling for it! It's like shooting fish in a barrel. Also, apparently real world investors are no smarter than Eve online investors when it comes to bitcoin or isk. So here's a little hint, fellas, if someone's offering to hold your bitcoins (or isk) for you, it's a scam.

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    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

  3. This is NOT a Bitcoin Ponzi scheme by Canth7 · · Score: 4, Insightful

    It's just a regular Ponzi scheme with Bitcoin marketing. All of the investments came from wealthy investors who put up an average of 1M HKD looking for 2-3X return in only a few short months. Sure, the operators of the Ponzi scheme / "exchange" told them that they were going to get bitcoin in return but very few BTC actually flowed to investors. This is not really a Bitcoin story and the calls by HK regulators for banning Bitcoin is both unwarranted and won't stop the problem - there will always be suckers looking for a get rich quick scheme to draw them in, no matter what the medium of exchange may be.