While Bitcoin may be rising in popularity in markets like China, an increasing number of reports are coming in that suggest cases of possible fraud and theft. According to a report by Coin Desk, an example of this could be the shut down of a Chinese Bitcoin trading platform called GBL, which claimed to be based in Hong Kong. While the shut down itself may not be news worthy, the fact that around $4.1 million worth of user’s money disappeared with it is.The company was reportedly launched in May 2013, and its domain, btc-glb.com, was registered on May 9. A post later that month by Bitcoin Talk forum user, zhaoxianpeng, was seen promoting the site. Other forum users, however, were suspicious about the new platform. According to an unverified translation by the source, many commenters noted that the site’s server was in based in Beijing, contrary to the company’s claim of being based out of Hong Kong.
Bitcoin fraud leads to $4.1 million worth of digital currency disappearing
Users also pointed out that the company did not come with straightforward contact information on their site and that the platform made use of information picked up from other websites. According to Want China Times, GBL registered as a company with the Hong Kong authorities on June 10, but did not receive a license for financial services. Despite this, GBL was able to get 1,000 investors, according to Hong Kong-based newspaper The Standard. After attracting a sizable number of investors, the platform shut down on October 26. The official website for GBL can no longer be found. The forum thread on Bitcoin Talk, according to the source, now comes with a large red warning notice from a moderator saying, “Be careful, scam”. The address listed on the company’s website was also found to be a fake, and the Hong Kong police are now investigating the case. This is not the first case in which Bitcoin theft has been reported. An Australian wallet service, inputs.io, recently reported the theft of over a million dollars worth of the digital currency. The founder of the service was reported saying, at the time, that it is no longer safe to store digital currency on computers that are hooked up to the Internet. With GBL, though, the warning signs were there, and it is advisable for investors to watch out for malicious looking platforms before pumping in their money.
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