MyCoin customers allegedly lost about $8 million and not over $300 million as previously reported by the media. The amended estimate was issued after 43 MyCoin customers had filed reports to the local police on February 11th.
The Hong Kong-based bitcoin trading platform MyCoin closed without notice in January, leaving customers without access to their investments. The customers’ complaints state that the exchange operated as a Ponzi scheme, promising existing clients prizes for attracting new users.
The total amount lost appeared to have been largely exaggerated by the media, as a Bitcointalk user had suggested when the news broke. The latest figure, amended by the Hong Kong Commercial Crime Bureau, is much smaller thanks to a reduced estimate of the number of victims. The South China Morning Post report on Monday February 9th that 3,000 customers lost their funds was based on MyCoin’s claim that they had 3,000 clients in Hong Kong.
However, only 43 MyCoin clients went to the police on Wednesday, according to a South China Morning Post article on February 11th. Earlier, Leung Yiu-Cheung, a member of the Legislative Council of Hong Kong, claimed he received complaints from about 30 MyCoin clients while 5 more plaintiffs had contacted another lawmaker, James To Kun-sun. More cases are expected to be opened this week by outraged clients.
Legislators have expressed concerns that the police investigation might be hampered by a lack of written records but they believe that computer records of transactions kept by MyCoin might be matched to clients’ records as proof of investment. It had been reported in the Chinese media that the police would consider the case under a range of conditions including the location of transactions in Hong Kong.
The story spread after the Hong Kong Monetary Authority warned the public to be cautious with cryptocurrencies. Apparently, Leung Yiu-chung was not satisfied with HKMA’s warning. Expressing his concern at the non-monetary status of bitcoin, he suggested that regulators should ban the sale of bitcoin in Hong Kong altogether.
"I told the HKMA that bitcoin is more than just an investment product. In fact bitcoins can be used for shopping, which resembles [one of the functions] of currency so I am of the view that the HKMA can do more about this matter."