Did Chinese Bitcoin Trading Site Go Bankrupt And Lose $386M?

MyCoin.hk, a bitcoin trading and investment site based out of Hong Kong, has reportedly lost $396.9 million (HK $3 billion) worth of its customers’ bitcoins and has fell into bankruptcy, CoinTelegraph reported Monday (Feb. 9).

At least that’s what one report says. There’s still speculation among bitcoin community forums that the news is being falsely spread and overblown. If the initial reports are true, however, the bitcoin loss is said to have impacted as many as 3,000 users, but the total amount lost hasn’t been fully discovered — nor has the party responsible for the loss.

“No one seems to know who is behind this,” one user who is said to have invested around $167,000 in bitcoin contracts through MyCoin told CoinTelegraph. “Everyone says they too are victims … but we were told by those at higher tiers [of the scheme] that we can get our money back if we find more new clients.”

According to the article, MyCoin has been questioned by some investors who didn’t feel as though the company’s reporting methods were transparent. Some reported that upon providing bitcoin, there were no proof of payments or other verifiable methods that were used to ensure the transactions were completed in a secure method. The payouts have also reportedly not been up to what investors expected, according to one user.

“I was told by my real estate agent that the profit would be over HK$2 million after one year,” said one investor who said she lost around $232,000. The largest bitcoin contract investment is expected to be somewhere around $6.4 million.

MyCoin hasn’t publicly commented in the media, but there has been support in the Chinese financial sector for the government to ban the virtual currency. Russia is one country who has banned bitcoin websites recently. In light of this MyCoin controversy, there’s been more chatter in the Chinese financial sector to ban bitcoin all together.

But as this news of the MyCoin controversy spreads, there’s also talk on bitcoin forums that the amount the company lost is fake. But even on the forum, there is a dispute on both sides about the legitimacy of the report. Until MyCoin formally comments, the bitcoin community will have to sit and wait.