Hong Kong Police Arrests 5 Suspects Involved in $8.1M MyCoin Bitcoin Scam

The Hong Kong’s police arrested five individuals, who have allegedly been involved in MyCoin’s investment scheme.

Photo: Funki_Munki/Flickr

Photo: Funki_Munki/Flickr

The police of Hong Kong has arrested five individuals who are believed to be engaged in fraudulent activities related to the collapsed bitcoin exchange MyCoin. The digital currency trading platform went bankrupt last month and left its office in Hong Kong, taking away around US $8 million from its investors.

The company, which acted as a pyramid or Ponzi scheme, offered its clients HK$400,000 contracts and promised a return of HK$1 million. In general, about 3,000 Hongkongers made the virtual currency investments in MyCoin.

Besides, investors were promised money prizes and Mercedes-Benz cars for attracting others to join the program. The biggest investment, made by a client, totals HK$50 million (equal to US$6.45 million).

The suspects include three women between 48 and 55 and two brothers, 34 and 37 years old. One of the women was arrested at a casino ship anchored off North Point, while the other four were detained at their homes. None of the arrested was employed, except one suspect, who served as an insurance agent.

“The three women were accused of collecting money from some of the victims to help them invest in bitcoin trading between January and December last year. The two male suspects were alleged to have arranged venues to promote the investment,” SCMP informed.

Although the police did not unveil the name of the company, the clients identified it as Rich Might Investment. The police is currently in search for shareholders, directors of the exchange and other people, who are involved in the case.

The commercial crime bureau started investigation last month after it received a number of complaints from the company’s clients, who had been investing in the exchange since January 2014.

“They claimed their accounts were not in operation since December last year,” a police spokeswoman stated. “They were unable to make withdrawals from their accounts and could not continue trading. They suspected they had been cheated.”

MyCoin changed its trading rules last December, prohibiting clients to withdraw their bitcoins unless they recruited other investors.

SCMP reported: “Companies Registry records show that William Dennis Atwood resigned as director of Rich Might on November 10 last year before it changed trading rules to stop investors cashing in all their bitcoin. Atwood transferred all of his shares on the same day to a British Virgin Islands-based company, Fascinating Horizon Overseas.”

In January, the company announced that its office in Tsim Sha Tsui would be shut down due to renovations. According to some investors, the closure of the exchange may have cost its customers on average HK$3 billion.

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