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Asian Bitcoin exchange MyCoin goes offline with £254 million

Hong-Kong based Bitcoin exchange MyCoin has disappeared from the Internet, leaving around 3,000 investors out of pocket with no assurances of return.

The firm recently pushed a new recruitment drive, promising investors lucrative rewards like a Mercedes-Benz car if they managed to find new clients to buy Bitcoin.

It looks like a full snatch-and-run, with contact numbers disconnected and email addresses set to auto-respond messages. Investors were not given any prior warning of the immediate closure, but the recent rewards show it might have been dire times.

Several investors hold over HK$500,000 (£42,358) in MyCoin, all of which has disappeared without any written investment or proof that the exchange had happened.

An 81-year old woman spent HK$400,000 (£33,886) after her real-estate agent claimed she could double her investment in just one year. Gambling on the potential of double money, Ms. Chan has lost almost all of her available cash.

In December, MyCoin stopped investors from cashing out on investments unless they brought in new clients. Investors were able to sell Bitcoin shares 10 times lower than the market price.

The lack of regulation and security in Hong Kong over Bitcoin makes these investments highly likely to be fraudulent schemes, especially given the lacklustre performance of Bitcoin over 2014.

Bitcoin has also become a less valued commodity with several government banks claiming it is not a real currency. The news on its fluctuating price point has put off some investors too, who might have tried to gamble in the early stages.

David has been a technology journalist for over six years, covering a wide range of sectors. He currently researches apps, app sectors and app markets for Business of Apps, and has written for ITProPortal, RTInsights, ReadWrite, and Digital Trends.