MyCoin was one of the biggest scams to hit the shores of Hong Kong this year. The alleged bitcoin exchange based out of Hong Kong was in fact an elaborate Ponzi scheme that successfully managed to rip off over $387 million dollars in customer investments after they shut shop overnight earlier this year.
Many South East Asian and Chinese investors were victims of this Ponzi scheme, which has got the police forces in multiple countries conducting their own investigations to ensure justice is served. Hong Kong was the first to counter some success in March after the cops there managed to arrest six people who were allegedly connected to the scam. Now as the investigation continues, the Criminal Investigation Bureau in Taipei, Taiwan has arrested two people, Lu Kaun-wei and Chen Yun-fei for their alleged involvement in MyCoin scam.
Upon arrest, the duo were charged for being part of the MyCoin fraud. Both Lu and Chen were allegedly responsible for organizing several events for MyCoin across Taiwan. During these events they had convinced investors to create accounts with MyCoin’s parent company and spend as much as $49,600 for 90 bitcoins.
MyCoin had convinced investors of very high returns and got them to invest huge amounts of money into MyCoin bitcoin exchange, which doesn’t really exist. Further investigation into MyCoin’s business has led the investigators to believe that MyCoin was never into bitcoin business, but instead they were running a Ponzi scheme with a bitcoin exchange as a front.
It was found that investors from Mainland China were the most affected in the MyCoin bitcoin scam. MyCoin promoters made their Ponzi scheme look more convincing by throwing lavish parties, giving away expensive gifts and sponsoring trips for those who had invested in MyCoin.
Soon after MyCoin scam, there were calls by few lawmakers to urging the government to completely ban bitcoin in Hong Kong. The law enforcement authorities continue their investigations and these arrest may provide them with the much needed breakthrough.