A dark cloud has been looming over MyCoin as a scandal continues to be uncovered. There’s a lot of data to sift through and it’s hard to know what’s accurate, only time will tell as more information becomes available.
It started with MyCoin
MyCoin is a Hong Kong based company professing to be a bitcoin exchange. The MyCoin website claims they’re a “leading global Bitcoin trading platform and application service provider”. As more information comes available it appears as if MyCoin may have been an elaborate ponzi scheme from the start, and a few sources have said the firm may never have held any bitcoin, as it was never possible to trade bitcoins on the website. The company made money from investors, by promising large returns. Later on, they required investors to sign on even more investors in order to receive payout. The scam went undetected because as investors brought in more investors, there was always enough money to pay the promised return. As of early January MyCoin has no longer been returning phone calls. It’s also commonly known that MyCoin’s director left a month before they closed, some believe he took MyCoin funds with him. It’s estimated that investors have sunk around $390 million into MyCoin, and the number may grow as more investors come to the police with complaints against the company.
It’s hard to know what will come of this exactly as the situation is still unfolding. Some say that it may come to the point of bitcoin being banned in Hong Kong, a place where bankers cautioned against investing in bitcoin and alternate currencies. It hasn’t come to a vote yet, but lawmakers are urging authorities to ban bitcoin. Because this has only recently come to light, it is still unknown if investors have lost everything, although that is a high possibility.