Bitcoin has a bad reputation all over the world, as the virtual currency is often associated with scams, hacking and Ponzi schemes. Several financial experts went as far as calling Bitcoin – “the biggest Ponzi scheme of all times” – a few years ago. Unfortunately, the latest arrest of people allegedly associated with the MyCoin Bitcoin Ponzi in Taiwan will only fuel the fire.
The MyCoin Scam – Millions Of Losses Across Multiple Countries
Earlier this year, the Bitcoin world received another major blow when the Mycoin investment platform turned out to be a major Ponzi scheme. Formerly known as a major Bitcoin exchange in Hong Kong, MyCoin ceased operations earlier this year for undisclosed reasons. One thing the company failed to mention is how they held quite a chunk of customer funds, without ever planning to repay them.
The Hong Kong Commercial Crime Bureau received multiple complaints from various MyCoin users. When all was said and done, a total of 43 claims against MyCoin were noted down, with every individual reporting losses between HK$50,000 and HK$15m. Needless to say, the total amount was staggering!
At the time of these reports, back in February of this year, total consumer losses were estimated at US$8.12m. However, the numbers published by local Hong Kong media outlets speculated the number could be as high as US$387m. In the end, no official numbers have ever been published, but the US$8.12m seemed to be far more accurate.
As a result of these allegations against MyCoin, Hong Kong government officials urged to ban Bitcoin completely. That being said, Bitcoin is still not deemed as an illegal good in Hong Kong to this very date, although warnings have been issued regarding the “unlawful nature of these virtual currencies, such as Bitcoin”.
Fast forward until a few days ago, when Taiwan authorities reported the arrest of two individuals allegedly connected to the MyCoin scam. China Times reported that Chen Yun-Fei and Lu Kuan-Wei had been apprehended by the authorities, as both individuals were part of the event hosting team associated with myCoin to lure in even more unknowing investors.
“Chen and Lu held several events for investors convincing each one to spend NT$1.62 million (US$49,600) for 90 BTC and an account with MyCoin’s parent company, which would distribute 0.63 of a bitcoin every day for a total value of NT$11,000 (US$337). The investors were told that their investment would be returned to them after just four and a half months.” – China Times reported.
Cracking Down On Illegal Bitcoin Activities
It is not the first time we see government authorities pursue leads to bring people to justice who facilitate Bitcoin transfer for illegal purposes. After illegal operations conducted by Silk Road and Silk Road 2.0, the MyCoin scam was one of the main reasons why Bitcoin has such a major PR problem when it comes to mainstream media publications.
As more of these events transpire, they will hopefully serve as a way for Bitcoin to redeem itself in the eyes of the public. A lot of damage has been done to the status of the virtual currency ecosystem, even though Bitcoin itself has never been to blame for any of these mishaps. The human element involved in all of these scams is the biggest worry and any of these illegal schemes could have taken place with fiat currency just as easily.
Source: China Times
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