Chinese Bitcoin Exchange Vanishes, Taking £2.5m of Coins With It 346
An anonymous reader writes "A Chinese Bitcoin exchange has vanished without trace, taking more than $4 million of the virtual currency with it and leaving profit-hungry investors out of pocket. GBL, the Chinese Bitcoin exchange was launched in May 2013 and putatively based in Hong Kong, despite its servers being registered in Beijing. However GBL's Hong Kong offices do not exist. GBL mysteriously disappeared in early November taking an estimated $4.1m (£2.6m) of Bitcoins with it." (Beware the auto-playing ads, with sound.)
Distributed security HEIST? (Score:5, Interesting)
Bitcoin was advertized as the virtual currency NOT stored in one place with NO detrimental reliances upon any ONE server, person or gov't. WTF?
Re:Recurring theme? (Score:3, Interesting)
Sadly no, people seem to cling to bitcoins no matter how many times this happens. The kind of people drawn to anonymous decentralized currencies aren't the kind that are going to be deterred by measurable financial risk.
Re:Recurring theme? (Score:5, Interesting)
The kind of people drawn to anonymous decentralized currencies aren't the kind that are going to be deterred by measurable financial risk.
The kind of people who use an anonymous decentralized currency as an investment (and leave their investment sitting in the exchange) are not the typical users of bitcoins. Once you have BTC, why not transfer that directly to your wallet? Why keep it in the uninsured exchange at all?
Re:Recurring theme? (Score:4, Interesting)
It's the early days. The early days of banking had similar problems as well.
A bigger issue though is a LOT of exchanges want a LOT of personal information in order to do the exchange.
The real risk is not one of these exchanges disappearing, but getting broken in - tons of them ask so much personal information that you're at a real risk of identity theft or having your bank account drained.
The others, well, can seem sketchy at times.
Re:Recurring theme? (Score:5, Interesting)
Indeed. It's about as far from untracable as you can get - you can trace every bitcoin back through every transaction it has ever been involved in to the moment of its creation - try to do *that* with cash. In fact except for the minor fact that you don't have to attach your name to an account it's a surveillance currency buff's wet dream.
Re:Sad Trombone? (Score:2, Interesting)
Actually, it'd be interesting to have a database of "story, first post" combos. Probably are some other epic ones out there.