Alleged Bitcoin Scam Leaves Millions Missing 148
First time accepted submitter OutOnARock writes Yahoo Finance is reporting on the latest Bitcoin scam, this time from Hong Kong. "Investors in a Hong Kong-based Bitcoin trading company fear they have fallen victim to a scam after it closed down, a lawmaker said Monday, adding losses could total HK$3 billion ($387 million). Leung Yiu-chung said his office recently received reports from dozens of investors in Hong Kong who paid a total of HK$40 million ($5.16 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 3,000 people and HK$3 billion are involved,' he told AFP."
Why are you throwing your money away on BTC? (Score:5, Funny)
Invest in my scheme! Send me money and I'll send you slips of paper that say you own gold!
Re: (Score:2)
Re: (Score:2)
Mr. Whipple [wikipedia.org] can answer your question.
Re: (Score:3)
Re: (Score:2)
You throw me the idol!
Throw me the whip and I'll throw you the idol!
A fool and his money... (Score:5, Insightful)
...as much as I try to build sympathy for these people, I just can't.
I mean, just reading about this not knowing what happened would make me think "Hmm this seems shady". I also don't think I'm an overly paranoid person by nature!
Re: (Score:2, Insightful)
Very few overly paranoid people consider themselves to be overly paranoid.
Most people, however, are not nearly as paranoid as they should be.
Re: (Score:3, Funny)
Re: (Score:2)
Why have you heard something?
Why? Probably because he has ears.
Re:A fool and his money... (Score:5, Funny)
A libertarian and his money...
10% of all bitcoins (Score:5, Insightful)
if I'm correctly reading the figured I'm finding online, there's about 14 million bitcoins in existence, worth just under 4 billion dollars.
10% of all bitcoins were just stolen, and don't we see a story like this just about once a year?
Once in a rare while I regret not getting into Bitcoins during their huge growth phase. Then I'm reminded of how often this happens and I'm glad I kept my money.
Re: (Score:3)
If you had gotten Bitcoins very early, ten dollars could have made you a multimillionaire.
Re:10% of all bitcoins (Score:5, Funny)
If you had bought bitcoins a year ago, a million dollars could have made you a thousandaire.
Re: (Score:2, Troll)
Funny and yet somehow appropriate reply coming from Ralph Wiggam.
Re: (Score:2)
If you had gotten Bitcoins very early, ten dollars could have made you a multimillionaire.
On paper. the problem is liquidity, i.e. where could you walk in with multimillions of Bitcoins and get dollars immediately in return, like you can with other currencies such as Euros, Pound Sterling, Yen, etc.
Re: (Score:2)
A family friend made enough real cash money off of Bitcoins to afford a rather nice mortgage-free house and a ton of disposable money, but you're right, I highly doubt that it ever made it into multimillions. Never even thought about it that way.
Re: (Score:2)
LOL, I bought $300 in bitcoin @ $0.50 a coin. Some time ago I sold off some of my holdings and bought 12.5 acres of land.
Mine is not in the millions, hell it is not even a million right now. But I have a bunch of bitcoin stored for later. Maybe it will make it to the millions, maybe not. Any way you look at it, I won on this investment.
Re: (Score:2)
I'd say it depends on precisely where those acres of land are. :-)
Re: (Score:2)
Where can you buy 12.5 acres of land for 300$? And Anon-Admin says he sold "some" of his Bitcoins, so that's not even all of 300$.
Re: (Score:2)
You don't understand investing. $300 worth bitcoins at $0.50/coin = 600 bitcoins. A bitcoin is worth $218 currently, so 600 bitcoins = 218 x 600 = $130,800. Not bad for a $300 investment.
Re: (Score:2)
If you had gotten Bitcoins very early, ten dollars could have made you a multimillionaire.
In related and equally meaningful news, if you had gotten a lotto ticket at the The Corner Store at the Riverbend Plaza in Wasaga last Friday within a specific time range, a few dollars would have made you an $50-million-aire.
Re: (Score:2)
Lotto relies on pure chance and usually only has one jackpot winner.
Buying Bitcoins early in the game was equivalent to buying penny stocks.
Re: (Score:2)
You mean like the exchanges we have today? No need to sell everything at once. If he had paid fractions of a cent or even a few cents per Bitcoin, it means a lot of profit even if Bitcoin is down to 200 dollars.
You only need to sell 14 Bitcoins per day at 200 dollars and you're a millionaire within a year.
Re: (Score:2)
Of course they would have, and did. There's enough liquidity going through Bitcoin exchanges every day for millions of dollars to go in/out of BTC.
A few years ago a co-worker and I had dinner, and since he was curious about Bitcoin I offered to pay my part of the dinner to him in BTC. That amounted to 10 BTC at the then-exchange rate of $4/BTC.
He sold them at $1000 each.
Re: (Score:2)
Re:10% of all bitcoins (Score:5, Insightful)
From what I'm reading, most of the problems isn't with the bitcoins, it is with the people who say if you give us bitcoins we'll give you money and keep giving you money. I don't think I've heard of bitcoins being stolen from someone's own wallet.
This adage proves the maxim that a sucker is born every minute. So someone promises you annual rates of return of 200 to 300% and you believe them. As my econ prof said, "The first thing you do when you find a $100 bill is ask Why me?" Anyone who could legitimately make that rate of return wouldn't need to find random suckers but quietly amassing their own fortune.
Re: (Score:2)
So someone promises you annual rates of return of 200 to 300% and you believe them.
Bitcoin, of course, very specifically [bitcoin.it] goes out of their way to indicate that there is no such promise.
Re: (Score:2)
So someone promises you annual rates of return of 200 to 300% and you believe them.
Bitcoin, of course, very specifically [bitcoin.it] goes out of their way to indicate that there is no such promise.
True. Bitcoin was just the new shiny in an old scam.
Re:10% of all bitcoins (Score:5, Interesting)
For whatever reason, whoever did the core work on bitcoins appears to have been pretty good; but the quality and competence of most of the surrounding activity and infrastructure are somewhere between 'crap' and 'are you sure that this isn't a parody?'
Re: (Score:3)
For whatever reason, whoever did the core work on bitcoins appears to have been pretty good; but the quality and competence of most of the surrounding activity and infrastructure are somewhere between 'crap' and 'are you sure that this isn't a parody?'
Well, US dollar bills are fairly well designed from an anti-counterfeitting standpoint.
However, if somebody walks up to you in the park and says that if you hand him a $20 bill today and show up at the same place tomorrow he'll give you back a $100 bill, and you give him your money, then you've lost your money. At no point was the integrity of the currency compromised - only the idiocy of those who have it.
None of these scams really have anything to do with bitcoin per se. They have to do with stupid peop
Re: (Score:3)
Re: (Score:3, Informative)
Re: (Score:2)
Ah, good to know. I'd love to know how much BTC overall was actually deposited that vanished.
Re:10% of all bitcoins (Score:4, Interesting)
To be a useful exchange medium, it has to be fairly easy(and not too costly) to sell things in exchange for it and buy things in exchange for it, ideally with enough liquidity that you'll never experience inconvenience and low enough short and medium term value fluctuation that just carrying some around in case you want to buy something does not become a substantial risk.
If however, most of the interested parties are looking to squirrel it away under their mattresses and wait for deflation to make them rich, you'll have an easy enough time selling any bitcoins you already have; but the ease of obtaining more, and the price you'll pay to do so, will be heavily dominated by the speculative waiting for the stuff to become more valuable. If it becomes too prevalent, that sort of hoarding activity will simultaneously reduce the rate of deflation(since wallets held by amateurs, or actively used in risky connected environments, are the ones that get lost much more often than the ones being held in cold storage by specialists) and help ensure that while bitcoins may become rarer, they are less likely to become more valuable in the process: the world is full of stuff that is getting rarer over time(basically anything 'antique' or 'collectable'). Most of it is virtually worthless, outside of any scrap value or the relatively low buying power of enthusiasts of obscure PEZ dispensers or whatever. Without continued activity using bitcoins as an exchange medium, there is nothing preventing the world's entire supply from dwindling to the status of an obscure techie relic of the early 21st century, maybe worth a few hundred thousand(if the entire set is available, in good condition) to decorate some
Re: (Score:2)
assuming BC remains something that is stable and trusted
And that's a big assumption. As you probably know, it is possible for the supply of something to go steadily downward and for the value to fall as well -- all that has to happen is for demand to fall faster than supply. The more people mistrust Bitcoin and refuse to use it as a medium of exchange, the lower the value goes.
Re: (Score:2)
Of course, this flies in the face of inflationary currencies like the USD, where the philosophy is by all means spend it right now before it becomes worthless.
Re: (Score:2)
Wow. What was going on in the 1920's and '30's? And HSBC (and all the big banks, really) is still committing major crimes as a bank in 2015.
Black Friday happened, then the Great Depression. Then banking regulation became a thing. If you work for a bank in the United States you really really should know about this stuff. I feel that people not knowing this is what caused the 2008 crash.
Amazing what the absence of govt really means (Score:5, Insightful)
Re: (Score:2, Troll)
Re:Amazing what the absence of govt really means (Score:5, Insightful)
"Jumping out of the frying pan and into the burner" adequately describes your position.
Currency is at its basis is valued in confidence. By that measure bitcoin not very competitive with almost any currency in the world.
My dollar means nothing to me because it can't be counterfeited and/or anonymously transmitted. It matters because when I head to the dealership to buy a car the value doesn't go down by 40% while I am finishing the paperwork, and also because when I go to the bank to withdraw it they *can't* say "sorry we got hacked, follow our twitter feed for updates".
Re: (Score:2)
Re: (Score:2)
That was kind of my whole point. Sure a bank could literally say that but they wouldn't because the whole FDIC system is there to prevent the need.
There hasn't really been a banking hack to that scale but I'll bet anything they have mitigation plans in place to make sure it does not affect that confidence I spoke of above.
If one of these exchanges tried to operate openly and got insurance (if they could) then people would be a lot more secure because the insurer would make damn sure they are doing things a
Re: (Score:2)
I don't believe anyone's had any significant loss of funds under the FDIC umbrella. Only a few days separated from your cash as they part out the failed bank.
Right, but under the Federal Reserve, the dollar has lost 97% of its purchasing power. Who gives a shit about the number in the bank account? It's the value.
Re: (Score:3, Informative)
Enron:
"The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was cited as the biggest audit failure" -- Wkipedia
MCI:
"fraud was accomplished prim
Re: (Score:3)
Funny, in at least two examples you could make the argument that the fraud was caused but deregulation. In other words the government getting out of the business of playing referee to the market. Enron - deregulated energy markets in the 90s. TB&W - banking industry deregulated in the 2000s. And none of these examples show that government involvement was the cause. So I am not sure what your point is.
Re: (Score:2)
It's a good thing bitcoin will be there to show people what the stability of a crypto currency looks like:
http://bitcoincharts.com/chart... [bitcoincharts.com] .
Yup no one there lost anything, but I guess when the "free market" bends you over it's ok because.....
Shadenfreude (Score:4, Insightful)
I think Bitcoin is one of the world's greatest producers of shadenfreude, but lately it's getting depressing. The cultist mentalities of a lot of them, and their incessant preaching towards their children and loved-ones has gone well beyond obsessed into cult status. The more I read bitcoin stories, the more depressed I get - not for the idiot that blew away all their money, but for the kids getting bitcoin IOUs for gifts, and the wives who are getting their shared vacation savings cashed in to buy more btc.
Re: (Score:3)
The standard of care in these situations is a period of intensive inpatient work in marketing or public relations. Efficacy is excellent, with most patients showing increased conversion eff
Re: (Score:2)
Re: (Score:3)
Proof that there's too much money in the world (Score:5, Insightful)
"One investor said she spent HK$1.3 million in swap options for the virtual currency last September. She said salespersons had told her she would recoup her investment in four months and make around 200-300 percent profit in one year."
How does someone this stupid get hold of that much money?
Re: (Score:2)
They inherit it.
HK$1.3 million is about $130,000 in real money.
Re: (Score:2)
Maybe they bought a flat in 2003 (end of the SARS period), and sold it recently. They'd have easily tripled their money in that period of time (the housing market has gone up by that much, and it still going up fast - Hong Kong property prices are currently between ridiculous and simply out of this world). If they bought a $2M flat in 2008, they could sell it for like $6M now. That'd be $4M cash profit in hand, plus whatever they have left after paying off the original mortgage. Or take out a new mortgage b
LMAO (Score:2)
Bitcoin: backed by math, er, I mean scammers!
This might be a dumb question... (Score:5, Funny)
... or possibly flamebait.
Are the Bitcoin skeptics like me allowed to be smug yet?
Re: (Score:2)
Are the Bitcoin skeptics like me allowed to be smug yet?
As soon as you blame USD and Euro for old-fashioned scams.
Re: (Score:2)
I'm pretty sure that making money off of "hours of getting yiffed by random furries" would fall under prostitution rather than a ponzi scheme. But you'd lose your profits on drycleaning.
Satoshi Nakamoto needs your bitcoin support. (Score:4, Funny)
Buy bitcoin, otherwise his stash will not grow in value.
Don't give your bitcoins to someone else!! (Score:4, Interesting)
If you transfer bitcoins to some other organization, then THEY have the bitcoins, not you. If you just want to give money to someone else, there are easier ways to do that than by using bitcoin :-).
it seems to me that if you want to use bitcoins, then you should keep the bitcoins in YOUR OWN wallet and under your OWN control until you want to spend them. Don't hand your bitcoins to a so-called "bank", a "trading company", or anyone else unless you purpose is to GIVE THEM the money. I don't know how successful bitcoins will be in the long term, but if they succeed it will be because people seriously protect the bitcoins.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Not sure about this, but the SCMP (local HK news paper) reported about people sending cheques to this company. That's real money, not BTC, that they gave that company. Details are thin, but it seems that this company asked for payment for to-be-mined BTC. At least they were running a BTC mining operation as well.
Eve Online in real world (Score:3)
I think that everybody who wants to play with bitcoins should first play a year or two of Eve Online. This can teach a lot about dangers of unregulated virtual currency at fraction of cost. From that point on you will approach all financial transactions with question "HOW they want to scam me?" rather than "Is there a chance it might be not as good as they promise? Naaah, somebody would say something if it is a scam."
Re: (Score:2)
/Oblg.
"Those who cannot remember the past are condemned to repeat it."
-- Winston Churchill quoting George Santayana
Re: (Score:3)
Not only that, but remember the old adage: "Those who cannot remember the past are condemned to repeat it."
Re: (Score:2)
Re:A Bitcoin scam? Impossible! (Score:5, Insightful)
Bitcoin by definition is a scam. You can't have a scam of a scam.
You've obviously never seen the movie "The Sting." :-)
Re: (Score:2)
Re:A Bitcoin scam? Impossible! (Score:5, Insightful)
Re:A Bitcoin scam? Impossible! (Score:5, Interesting)
>Bitcoin is like regular bank accounts where most of the moeny is in virtual ones and zeros.
No. Nope. Not. Bitcoin is like a banking system without a bank, where your friends and relatives keep slips of paper saying (anonymously) who is owed what on a dollar bill by dollar bill basis. When you want to use your money, it becomes hard to get anyone to actually give you cash for it. People are trying to find ways to change a few of those slips of paper without you knowing.
The whole thing is a nightmare. These scams will continue until people get burned enough to walk away.
Re:A Bitcoin scam? Impossible! (Score:5, Informative)
With a bank, they could shut down, and the government would handle their losses, so I'd say a bank is a lot freer to do stuff.
However, BitCoin is a buzzword, similar to how "MP3" was in the early 2000s, where one could have something related, use that term and sell it, such as "MP3 headphones", "MP3 batteries", even an ordinary cassette tape (as opposed to the MP3 player shaped as a cassette which worked in car stereos) marked as "good enough to copy MP3 files to it."
Same with BitCoin. Do a pyramid scheme, stick the term "BitCoin" on it, sit back, rake in the dough. Even though it has -nothing- to do with the cryptocurrency at all, it is just the same type of scam as previously.
Re: (Score:2)
http://www.therichest.com/rich... [therichest.com]
Re:A Bitcoin scam? Impossible! (Score:4, Informative)
It's more like a 419 scam. They are called 419 because that's the law that makes them *legal*.
The Wikipedia article seems to disagree with you: [wikipedia.org]
'The number "419" refers to the article of the Nigerian Criminal Code dealing with fraud.'
Nothing about them being legal, in most countries fraud is fraud. Do you have a citation that such scams are legal in Nigeria (or elsewhere)?
Re: (Score:2)
It's more like a 419 scam. They are called 419 because that's the law that makes them *legal*.
Hopefully that was a typo. It is called 419 because that is the section of Nigerian law [britannica.com] that makes it illegal.
Re: (Score:2)
Something's illegal in Nigeria?
Re: (Score:2)
Uhhh, no it's their broad statute that covers fraud:
"419. Any person who by any false pretence, and with intent to defraud, obtains from any other person anything capable of being stolen, or induces any other person to deliver to any person anything capable of being stolen, is guilty of a felony, and is liable to imprisonment for three years.
If the thing is of the value of one thou
Re: (Score:2)
They are called 419 because that's the law that makes them *legal*.
The number "419" refers to the article of the Nigerian Criminal Code dealing with fraud. So, no, that does not make them legal.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re:A Bitcoin scam? Impossible! (Score:5, Funny)
I was thinking the same thing. "Bitcoin scam" is redundant. It's kind of like saying "worthless Kardashian."
Re:A Bitcoin scam? Impossible! (Score:4, Insightful)
What's ironic about all these bitcoin scams is that they rely on a technology that removes the need for a middleman (e.g. a bank) to make transactions, the scams always involve people leaving their money in a 3rd party bitcoin bank rather than in a personal bitcoin wallet.
It's like people have bought into the idea of putting their money in safes, but when the "neighborhood safe inspector" comes door to door asking for the combinations to their safes, they don't realize that the whole point of a safe is that you ware not supposed to tell other people the combination.
Re:*scratches head* (Score:4, Informative)
How can they be missing? It's just digital data. Don't these bit-tards make backups?
Bit-tards don't make backups, or else they wouldn't be bit-tards. And then you have people who leave all their private keys online and people steal those and transfer the money away. And then you have people who run a Ponzi scheme and never had the funds in the first place, but shuttled the investments away and are living like kings in Patagonia.
Re: (Score:2)
Re: (Score:2)
Have you ever heard of an Escrow? In not you should look it up, lord knows I got an escrow on my house. It did not release the funds tell the inspectors and I signed off that the house was built right.
Same applies to buying with bitcoin. Use an escrow and you get your goods, the seller gets there coin, and the escrow provider get a small amount for handling the deal.
Re: (Score:2)
Re: (Score:2)
In what way is CHECKMULTISIG in the protocol not supporting escrow?
Re: (Score:2)
Re: (Score:2)
That's something completely different to claiming that the Bitcoin protocol doesn't support it, which it does.
(It seems BitPay has multisig escrow-capable wallets but I don't think it's part of their PoS solution yet)
http://blog.bitpay.com/2014/09... [bitpay.com]
Re: (Score:2)
Re: (Score:2)
That's your choice. I was just pointing out that contrary to your claim the Bitcoin protocol fully supports M-N transactions (which credit cards do not) and by using that functionality some really cool escrow solutions can be developed and deployed - without me having to trust a single merchant.
Re: (Score:2)
Re: (Score:2)
The functionality is available in the Bitcoin protocol. Your complaint is apparently about BitPay. It's like blaming RFC 5246 for an incomplete TLS implementation by Microsoft.
I have had no issues using Bitcoin for payments and didn't know there had been any (all the scams I've seen are about people storing their private keys with someone else).
Re: (Score:2)
Re: (Score:2)
No, the problem is with the technology, it depends on trusting the person it's sending money to deliver something. That is a flaw quite clearly. Unlike other technologies that depend on other methods to deliver like laws that can be enforced, Bitcoin is designed to make this difficult.
I don't see how Bitcoin is different than cash in this regard. If you are purchasing something without escrow then you will always run the risk of the other party making off with your money/property. If this happens, they still broke the law no matter if you were paying in cash, Bitcoins or Triganic Pu. If you don't trust the party you are doing the deal with you should take steps to protect yourself, no matter the currency.
Re: (Score:2)
Re: (Score:2)
Bitcoin is basically digital cash.
Would you hand that VPN provider cash? If not, then you probably shouldn't be handing them bitcoins.
I don't understand what pot-smoking in the Netherlands has to do with anything.
Cash doesn't provide charge-back service either. Look, Bitcoin is just like cash again!
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)