A year after Mt. Gox’s implosion, nearly $400 million has evaporated from a Hong Kong bitcoin exchange

Happy anniversary.
Happy anniversary.
Image: Reuters/Toru Hanai
We may earn a commission from links on this page.

MyCoin.HK was a Hong Kong hub for traders of the cryptocurrency, a locally-funded and operated exchange with an office in Kowloon and a pool of thousands of investors from the city, served by local lawyers and real estate agents.

But dozens of investors, including the elderly, now say their investments have completely disappeared, the South China Morning Post reports. The Kowloon office is shut and the company’s only director has apparently resigned, after transferring all his shares in the company to the British Virgin Islands.

MyCoin’s apparent implosion comes about a year after Mt. Gox, once the world’s largest bitcoin exchange, shut its doors. Bitcoin was the worst-performing investment in the world last year, and regulators in the US are moving to license and oversee operators, a far cry from the libertarian utopia envisioned by the currency’s original enthusiasts.

It is unclear whether MyCoin.HK ever actual offered bitcoin, or was merely an elaborate Ponzi scheme. Among other red flags, investors were asked in December to bring in new investors if they wanted to cash in their coins.

If indeed some HK$3 billion ($387 million) has been lost—an estimate based on the site’s marketing materials—the hard-fought battle to make bitcoin a reliable store of value just suffered another body blow. The publicity alone could be enough to scare wealthy Hong Kongers away from the cryptocurrency for some time. As the SCMP reports:

An 81-year-old woman surnamed Chan said she recovered only HK$1.2 million on her HK$3 million investment on seven bitcoin contracts. “I shouldn’t have been greedy. I was told by my real estate agent that the profit would be over HK$2 million after one year,” she said.

The Hong Kong Monetary Authority, the city’s central bank, has long warned investors away from bitcoin, and said late yesterday that the currency was “highly speculative,” and “urged the public to exercise extra caution when considering making transactions or investments with bitcoin.”