Investors caught in Bitcoin scam

bitcoin-noteInvestors in a Hong Kong-based Bitcoin trading company fear they have fallen victim to a scam after it closed down, with losses that could total $HK3 billion ($A499 million).

Politician Leung Yiu-chung, says his office recently received reports from dozens of investors in Hong Kong who paid a total of $HK40 million into the scheme run online by MyCoin, but the total loss may be vastly more.

“The number of cases is increasing. These two days I received calls about more than 30 cases. We estimate more than 3000 people and $HK3 billion are involved,” he told AFP.

One investor said she spent $HK1.3 million in swap options for the virtual currency last September.

She said salespeople had told her she would recoup her investment in four months and make about 200-300 per cent profit in one year.

The cryptocurrency was created in 2009 by a computer algorithm designed by one or more anonymous people.

It has since become a form of e-money that offers a largely anonymous payment system and can be stored either virtually or on a user’s hard drive.

But its development has been marred by concerns about links to illegal activities and a lack of oversight.

Tokyo-based MtGox, one of the longest established Bitcoin exchanges, collapsed due to a suspected theft worth nearly half a billion dollars.

The value of a Bitcoin, which soared to over $US1200 ($A1550) in 2013, was about $US285 in January.



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