As MyCoin Goes Bust, the Customers Worry Losing their Investments

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As MyCoin Goes Bust, the Customers Worry Losing their Investments

The South China Morning Post report that as MyCoin, a Hong Kong-based Bitcoin trading company, has shut down its operations, nearly 3,000 local investors may have lost combined value of more than HK$3 billion. Out of these, close to thirty concerned customers approached to the lawmaker Leung Yiu-chung and informed him about the losses.

The sudden collapse of the company has bothered a lot of investors and market observers. This was the same company that staged events at luxury hotels, including a road-show in Macau in August last year. The local police inform that the affected customers are going to report that deception was involved in a pyramid-style Ponzi scheme packaged as Bitcoin trading.

The report from the South China Morning Post indicates that the HK$3 billion figure is based on an earlier statement by the company that it had 3,000 clients in Hong Kong, each investing an average HK$1 million. Some customers have though come up with their complaints regarding the losses incurred while trading with MyCoin, they don’t see anyone behind this.

One user says that this is quite difficult to establish how much he lost because was not given written document or receipt as proof, apart from a trading account on the company’s trading platform. Also, they accuse that they were lured by promises of a HK$1 million return in four months for buying a HK$400,000 Bitcoin contract which would produce 90 Bitcoin on maturity.

Loss of Valuable Investments

Nonetheless, some unrealistic offers too came from the company; one such offer was that extra profits and prizes such as a Mercedes car or cash prizes would be paid if an investor found more new clients. Also, they were talked into buying contracts by real estate agents, law firm clerks or insurance agents.

One customer who lost his valuable investment says that he did not give any approval but the law firm clerk opened an account in his name after receiving a cheque from family members. There are several other allegations as well; one of them says that MyCoin did not pay according to the full Bitcoin price worth HK$20 per unit.

Though some notice was issued by the company, the affected customers admit that they were a bit worried that police will refuse to handle the cases because there were no written records. Nonetheless, the value of Bitcoin has plummeted from its historical high of US$1,124 in November 2013 to as low as US$181.45 last month.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com