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£2.5m vanishes as major Chinese Bitcoin exchange disappears

There may be 10 million bicycles in Beijing, but that’s no compensation for Bitcoin investors in China who are realising that there are no longer 25 million Yuan in their bank accounts.

Those who had deposited their money with Global Bond Limited (GBL), a Bitcoin exchange, seem to have been duped after the platform shut down, and took 25 million Yuan (£2.5 million) along with it.

According to coindesk, users’ swindle-senses began tingling way back in May this year when the site first launched. Eagle-eyed commentators noted that GBL's server was based in Beijing despite the site’s claim that it was based in Hong Kong.

It also became clear that GBL hadn’t provided clear contact information, nor had they ever received a licence for financial services from authorities.

Despite all this, GBL still managed to attract 1,000 mainland investors keen to belly flop onto the Bitcoin bandwagon, and in September GBL began capping the amount of money users could withdraw.

Soon after - on 26 October - users were unable to cash out money all together as GBL vanished without a trace.

The HQ address that had been provided on the website turned out to be fake and the Hong Kong police have now been called in to draft a full-scale investigation.

The news is a blow to a country that is quickly becoming a beacon in the Bitcoin universe. BTC China was the first trading platform to trade bitcoins for Yuan and last week it momentarily overtook Mt. Gox to become the world’s number one Bitcoin exchange.

On a more practical level, a bar in Beijing became the first in China to accept Bitcoin as a legitimate form of payment. Clearly, the digital currency’s potential is becoming a talking point in a country whose online activities have historically been curtailed by the 'Great Firewall'.

This latest theft comes just days after news that thieves hacked into one of the world’s largest wallet services, stealing £650,000 worth of digital cash.