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Another Bitcoin Exchange Fraud
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.
Yet more proof (as if you needed it) that storing your financial assets with unregulated "financial institutions" is a bad idea. Until Bitcoin exchanges are insured and regulated they will continue to be hacked and people will continue to lose bitcoins, this just damages bitcoin's reputation. It's a fantastic idea that is getting a bad wrap because of the wild west situation of exchanges.
This "exchange" promise great return, wasn't listed in the huge directory of exchanges http://exchangewar.info/. This "exchange" didn't have any API for automation and arbitration. Lets just call this exchange a ponzi scheme. There is those get rich quick scheme everywhere... also in the bitcoin universe.
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.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
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.
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..
world was created 5 seconds before this post as it is.
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.