According to local news, investors might have lost more than $300 million in a bitcoin exchange crash. One Bitcointalk user believes that the figures are grossly exaggerated and estimates the losses at $65,000 at most.
Mycoin, the Hong Kong-based self-styled “leading global Bitcoin trading platform and application service provider”, unexpectedly closed in January, leaving its investors outraged, reports the South China Morning Post. According to the journalists’ estimate, the total loss suffered by 3,000 local investors may reach HK$3 billion (380 million USD). The calculation is based on an earlier statement made by Mycoin, which claimed that it had 3,000 clients in Hong Kong with average investments of HK$1 million (130,000 USD).
Customers are accusing the company of being a Ponzi scheme disguised as a bitcoin trading platform. Indeed, the investors were promised exaggerated returns on their investments and special prizes like a Mercedes Benz car if they found new customers. Later on, finding new customers became a prerequisite of getting the invested money back. Some of the clients had even mortgaged their property to raise investment funds. Still, it is difficult to prove anything in this case, as the company never gave its customers any confirmations or receipts in writing.
However, the article is characterized as “fake news” by the user hknews on Bitcointalk.org. Firstly, he claims, MyCoin had “a really small market share”. Secondly, the demise of MyCoin was not at all unexpected. More than six months ago, it had started to delay bitcoin withdrawals and set a daily withdraw limit, constantly reducing it ever since. Thirdly, customers would not have lost more than HK$500,000 (around 65,000 USD) because in the end of last year, to attract more investors and keep old customers from cashing their holdings, Mycoin began to sell fake bitcoins, putting their price at less than 20 US dollars, and it was at this price that most investments were made. The situation, according to the user, has been the subject of discussion on many Chinese bitcoin forums since the end of 2014.
The news echoes a recent study by American scholars who discovered that Ponzi schemes are the most profitable of all bitcoin scams.
The MyCoin website is still functioning. The current price of bitcoin, according to MyCoin, is HK$ 11.05 (1.42 USD).