Police in Hong Kong are reportedly investigating the disappearance of many thousands of (Hong Kong) dollars at the HKCex exchange, reports South China Morning Post this weekend.
The exchange, which opened its doors just last month, has appeared to have ceased business operations already, with customers being unable to contact the company and a website that isn’t functioning properly.
HKCex Dominic Rivers, aged 34 and a former IT professional, reported a significant loss on the exchange of HK$67,000 in digital currency, worth $8,500 in US Dollars.
Making matters worse, the value of bitcoin has risen over the past month, making the loss endured by Rivers closer to HK$80,000, or over $10,000 USD.
“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,” a Hong Kong police spokeswoman said on the situation. “Investigations are under way.”
Rivers welcomes the probe, but doesn’t exhibit confidence in what authorities can do to help him recover his funds.
“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 told SCMP.
Interestingly enough, an HKCex spokesperson Lavin Lam just last month said that “We are an honest and transparent business [and] have all the necessary permits and licences to conduct this activity.”
The exchange had also previously reported two investments totaling $27 million USD — but remained completely secretive on just who those financial backers were, an uncommon tactic when it comes to venture capitalism, especially in the tech industry.
While it’s too soon to declare that the exchange owners have made away will investor money, the behavior on the part of HKCex is really nothing but suspicious.