Just yesterday, several media outlets were reporting on the closing down of the Mycoin.hk ponzi scheme and customers losing up to HK$3 million in total. Affected customers were swayed into buying investment contracts with fiat currency, and they would receive a full payout worth 90 Bitcoin once their contract matured. Earlier today, some more details regarding this worrying turn of events were unveiled, and as as expected, Hong Kong has now issued an official warning on digital currencies.
Mycoin.hk Director Resigned in November of 2014
As we reported in our article yesterday, the issues with Mycoin.hk started at the end of 2014 when investors were no longer allowed to withdraw money unless they found more investors. Everyone assumed that this decision was made by the director of Mycoin.hk, as he would be the only one in a position to do such a thing.
Little did we all know, as the Mycoin director – William Dennis Atwood – had actually resigned in November of 2014, weeks prior to the withdrawals being halted. In fact, according to evidence presented by the South China Morning Post, Mr. Atwood transferred all of his company shares to Fascinating Horizons Overseas Ltd, which is a British Virgin Islands-based company.
Despite reports claiming that up to thousands of investors have lost massive amounts of money due to this ponzi scheme, only about 30 of the are filing an official report with the Hong Kong authorities. Considering the fact that none of the victims ever received anything in writing from Mycoin.hk, the investigation will prove to be far from easy.
Hong Kong Monetary Authority Issues Warning on Digital Currency
Bitcoin enthusiasts saw this coming from a mile away, but the Hong Kong Monetary Authority (HKMA) issued an official warning on digital currencies. They also addressed the situation regarding Mycoin.hk as possibly involving fraud or pyramid scheme tactics. As far as Bitcoin goes, here is what they had to say :
“Given the highly speculative nature of Bitcoin, we have all along urged the public to exercise extra caution when considering making transactions or investments with Bitcoin. We would like to remind members of the public to stay vigilant and guard against unscrupulous practices when participating in any investment plan, regardless of whether the products are bitcoin … or any type of financial or non-financial assets.”