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Bitcoin, released to the world in 2009 by a person or people called Satoshi Nakamoto, is not backed by a central bank or a government and is seen as an alternative payment system. In February 2013, Bitcoin went into the mainstream as a monetary crisis threatened to bankrupt Cyprus, seen as a safer bet. Early adopters of Bitcoin have been richly rewarded as the price has soared – in one case, a young Norwegian bought a house from an $850,000 windfall on a US$22 investment.

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Bitcoin firm HXCex being probed after customer says he lost HK$67,000

One alleged victim says he is out HK$67,000, while company seems to have ceased work

PUBLISHED : Monday, 23 June, 2014, 4:57am
UPDATED : Monday, 23 June, 2014, 9:50am
 

Police are investigating the disappearance of tens of thousands of dollars worth of the virtual currency bitcoin in a move that could open the floodgates for more potential victims to come forward.

Scrutiny has fallen on the conduct of industry newcomer Hong Kong Crypto Exchange (HKCex), whose operation appears to have ground to a halt. Customers said they have been unable to reach the company, which opened for business last month, and its website returns an error message.

The inquiry comes as Hong Kong hosts its first major conference on bitcoins starting tomorrow.

Dominic Rivers, 34, a former IT engineer, reported that he had lost HK$67,000.

A police spokeswoman said: "The informant reported that he stored some virtual currency … in a company providing services on storage and trading in virtual currency in mid-May but discovered later he was unable to retrieve money from the company. Investigations are under way."

It is understood there may be more potential victims on the mainland.

Welcoming the probe, Rivers said he hoped that the authorities would take internet fraud seriously. "I fear that to them it's just new-fangled technology, and they are behind the times so they don't know how to deal with it, don't understand it and so ignore it," he said.

HKCex spokesman Lavin Lam, in an e-mail last month, said: "We are an honest and transparent business [and] have all the necessary permits and licences to conduct this activity." Attempts to contact the company again in recent days have failed.

The rising value of bitcoins over the past month puts Rivers' loss nearer HK$80,000.

A Post inspection of the company's claimed address at 56 Belcher Street in Kennedy Town found no links to the firm.

When HKCex announced it had secured investment on two occasions totalling US$27 million, it remained secretive about its anonymous backers, going against the industry trend.

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This article is now closed to comments

andreaswagner
Amazing how dumb some people are when it comes to their money.
Ant Lee
regardless on your view on bitcoins, if there is legitimate fraud, the police should take it seriously and catch the criminals. it only shows we are ignorant and narrow minded if only focus on blaming the victims whenever something is new and risky.
sipsip1238
Until bitcoins become something more than an instrument for people hoping to make a quick buck, it's going to be hard for it to become a currency.
You've got idiots left a right trying to claim they know a thing or two about bitcoins hoping that the prices will skyrocket.
HKCex spokesman Lavin Lam, in an e-mail last month, said: "We are an honest and transparent business [and] have all the necessary permits and licences to conduct this activity." Attempts to contact the company again in recent days have failed.
Do many legit businesses send out emails like these?
gfim
A fool and his money, I mean bitcoin, are soon parted...
daily
I still can't believe that there are so many people out there that cannot see Bitcoin is nothing more than a channel for criminals to launder money at the expense of regular consumers................This guy kind of got what he deserves.
tomonday
you are just an idiot
tomonday
you are just an idiot

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