Less than a month after Coinbase became the first regulated Bitcoin exchange in the US, attention is turning to an overseas exchange that has mysteriously closed its physical offices.
MyCoin, which is looking more like a classic Ponzi scheme than a legitimate exchange, reportedly had as much as HK$3 billion ($386.9 million) tied up in it at the time it was shut down. It is believed that as many as 3,000 clients may have invested as much as $129,000 each. The biggest reported loss for a single victim is said to be KH$50 million, or around $6.5 million USD.
As of writing, the value of Bitcoin appears to be largely unaffected by the news.
As the South China Morning Post notes, MyCoin offered clients some pretty extravagant incentives to recruit clients to the company including cash bonuses and Mercedes-Benz cars. Whether or not any clients actually got any of those rewards is unclear.
Those that opened trading accounts received no proof of purchase or receipts, only an online account on the trading platform. Roughly 30 clients plan to file reports with local police on Wednesday although without proof, it may be hard to make any headway.
The shutdown could push authorities to impose greater regulations on Bitcoins in the region.
MyCoin’s website is still active although matters look pretty suspect as the trading price in USD is less than $2 (BTC is trading at over $217 elsewhere).