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back to article Chinese Bitcoin exchange DISAPPEARS, along with £2.5 MEEELLION

Chinese Bitcoin exchange GBL has shut down, taking with it over 25 million yuan (£2.5m, $US4.1m) of investors’ money, in another warning to those who don’t look before they leap with the digital currency. Users first suspected something was up on October 26th when they could no longer access the site of Global Bond Limited (GBL …

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Silver badge

Too good to be true?

When will people learn?

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Paris Hilton

BUT YOU CAN'T TRUST THE GOVERNMENT!!

Paris 'cos even she has more sense than to get paid in bitcoins

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Anonymous Coward

A fool and their money

There's a lesson in there somewhere.

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Re: A fool and their money

Indeed. And that lesson is "set up a bitcoin exchange".

Better make sure you fake your identity, because otherwise paranoid conspiracy loons UN stormtroopers sent by the Freemasons might get upset when you abscond with the money.

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Anonymous Coward

Bwahahahah.

Serves people right. Honestly, this sort of thing is just one step away from falling for a Nigerian Prince asking you to help cart a few mil out of his country.

Would you just walk into a building and hand over your money because they'd written the word 'BANK' outside? Maybe, but then, you're a tool.

Do your research.

The whole Bitcoin thing is going to implode on itself, and has already started to do so.

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"The whole Bitcoin thing is going to implode on itself, and has already started to do so."

In what way?

I mean yes, I agree with your post that people should be careful before sending money places, but I'm curious in what way Bitcoin as a whole is already starting to implode?

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Anonymous Coward

> Would you just walk into a building and hand over your money because they'd written the word 'BANK' outside?

Ermmm... where were you in 2007?

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Anonymous Coward

RE: In what way?

Because Bitcoin only has an value in monetary exchange towards other currencies due to two things:

a) trust that it can indeed be exchanged to a government-backed currency, in order to do legitimate business with the rest of the world

b) scarcity, which is the only reason why people are granting it the equivalent of an exchange value at all

With item (a)'s 'truth' clause looking like it will collapse, with too many questions not being addressed including government intervention into the idea that it will be honored for exchange at all, and item (b)'s issue possibly being compromised, Bitcoin does not look promising long term - Bitcoin is beginning to look like just another pyramid scheme with early adopters grabbing the money and, by the time the general public joins in, the gravy train has left the station.

"Implode" as in fewer non-techie people, IMHO, are even considering getting involved with this Bitcoin scheme, especially when scams like this happen. Bitcoin is losing trust FAST in the non-geek world and, with that, it will simply become yet another internet dot-com style trend bubble.

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Go

If they are actually registered in China...

If they are actually registered in China, wouldnt names of those behind the company be available? So prosecuting this as just a regular case of fraud shouldnt be impossible.

If any of the investors were Chinese there would probably be a case to answer. Then again if it's only foreigners, it's probably safe to say nothing will happen....

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Re: If they are actually registered in China...

Ancient Chinese proverb say; Man with £2.5 million no longer live in China.

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Re: If they are actually registered in China...

A country with a population of 1.2Bn where huge tracts are completely undeveloped is going to have a hard time finding a Mr Tan (or whatever the false name equivalent of Smith is) who can bribe his way out of trouble.

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Coffee/keyboard

Re: Ancient Chinese proverb ...

You stupid sod. I nearly choked on my coffee. Have an upvote and a bill for screen cleaning.

Bitcoins NOT accepted.

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Re: If they are actually registered in China...

I don't know the details of this particular fraud, but previously when exchange owners have run off with their clients bitcoins 1) the owner of the exchange has been anonymous, 2) the owners of the bitcoins have been anonymous, 3) there are no breadcrumbs so evidence is missing and 4) hello, there's no laws governing bitcoin exchanges.

The only thing guaranteeing bitcoin exchanges is trust -- which is extra bizarre with a currency which exists partly because conspiracy nuts don't trust governments, and partly because criminals want ways of laundering money. One wouldn't think that was a situation which fostered trust and honesty.

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Hot on the heels of this one...

http://www.brisbanetimes.com.au/it-pro/security-it/australian-bitcoin-bank-hacked-1m-stolen-20131108-hv2iv.html

Odd how he never reported it....

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I should feel sorry for the poor fools who've lost money in this, but mostly I feel they've got what they deserve for buying into a bloody stupid idea.

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So buying long numbers that can only be calculated cost effectively with stolen electricity and whose main use is money laundering and illegal trade and tax dodging, and whose stores and exchanges are illiquid and shaky as all hell isn't your thing?

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Any currency that can be used for "money laundering and illegal trade and tax dodging" has obviously a greater utility than standard money, which cannot without bringing trouble to the user.

So the former must be the more desirable currency and thus increase in value?

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Just because you're using Bitcoins for "money laundering and illegal trade and tax dodging", doesn't mean you're exempt from the laws regarding "money laundering and illegal trade and tax dodging". Your local law enforcement agencies will pretty soon want a word with you.

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The whole thing seems to operate on the back of the blackmarket anyway, what else attaches worth to a bitcoin?

Chances are it's mostly drug money.

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You make it sound like it's a bad idea to trust your fortune to a bunch of criminals.

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@Cliff

Are you saying that I should move my money out of HSBC?

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3 down votes but no-one has attempted to explain why bitcoin might have a value outside junkies and perverts.

Consider why a currency is worth having. It is because you can buy things with it.

What can you buy that requires you to pay in bitcoin?

- Drugs, Guns and CP.

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Pint

And beer according to Alex Brett @16:28

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>> And beer according to Alex Brett @16:28

"All of our pubs accept cash; all except the Coalheavers Arms accept Visa and Mastercard."

But not only bitcoin, the point is why do you need bitcoins? Because you're a pervert junkie.

(or you're after a novelty selling point. :D )

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Alien

Lets see

It has value as a mathematical exercise.

It has value for hardware designers to make rigs which can computes hash rates faster and faster.

It has value for small time traders who like the speculative angle of having something new and unconventional to play with.

It has value for students across many disciplines, watching how the new emerging currency plays out, and how the status quo gets shaken up by it.

It has value to the tinfoil hat crowd who have an innate distrust of "Big Money".

It has value to hoarders who hate throwing out old tech just because it will no longer run the latest iteration of Battlefield/COD, and instead repurpose that machine to become a mining rig.

Lets have a go using your logic.

Given that the primary transactional method for guns, drugs, and even childporn is cash, that means that you, yes YOU, are a kiddy-fiddling, crack-smoking, mass-murderer if you use any cash whatsoever.

Poor diddums is now gonna downvote me for providing him with credible examples, and lumping him in with the rest of the cash paying killers, junkies and perverts.

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Re: Lets see

>It has value as a mathematical exercise.

You misunderstand currency. Currency is a medium of exchange, it's "value" is about what it can be exchanged with.

Your analogies are as dumb as suggesting the value of ten pound notes lies in the printing of them.

So I say again, what are bitcoins exchanged for? Beer? How many bitcoin transfers are about beer do we think?

No, it's drugs, guns and kiddie porn or they'd just use Visa.

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Re: Lets see

as an "idea" it is the future, make no mistakes, everything is digital and online, why shouldn't money be.

however as it is now, execution is lacking. huge waste of resources with no other purpose than converting energy into itself.

this HAS to be thoroughly mated with distributed computing projects to actually CONTRIBUTE to scientific progress. gridcoin tried this but failed massively (actual "mining" is still just an energy waste and is only used as a reward/check for running boinc on same pc).

designing a good cryptocurrency - hashing has to be a thin outer layer (1%) put over massive inner layer of boinc (99%). fully integrated

this way most of the computing power goes to valuable scientific research instead of pointless empty crypto hashing.

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Re: Lets see

> everything is digital and online, why shouldn't money be.

Money IS digital and online. Only a tiny fraction of dollars, euros or pounds, exist as physical objects. The vast majority only ever exist as bits and bytes.

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Pop...

...goes the bubble.

Entirely predictable.

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Yeah, must always look out for shady businesses, but honestly, just a little bit of background research could have saved these investors their money.

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Communist Governments

They know how to keep their troublemakers in line!

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WOW what a lot of ignorant comments!

This happened over 2 weeks ago and the price of bitcoin still continues to rise:

http://blockchain.info/charts/market-price

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Holmes

Plus ça ne change jamais

>>This happened over 2 weeks ago and the price of bitcoin still continues to rise:

Thus proving:

1: that there's always money in illegal drugs and guns, just like there is in legal drugs and guns, even though it gets stolen quite often from buyers and sellers in both markets;

2: that an offer of a free lunch will always find takers, no matter how many times it turns out to be a shit sandwich.

People, eh?

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Re: Plus ça ne change jamais

You and me, we are all just people.

Theres Nowt querer than folk lad!

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Re: Plus ça ne change jamais

Yet when the main exchange for illegal trading got taken out, the price also - after a very short drop (of a matter hours) - went up.

For your second point, well, how is it different to any other high risk investment? High risk investments typically have higher returns "a free lunch" but a higher risk "shit sandwich". I find it odd that Bitcoin seems to attract such ridicule, especially when the evidence shows the high risk seems to be paying off (even people who bought at the height of the last bubble right before it burst will now have earned 30% in 7 months, which is pretty good going). If one year someone put 90% of their savings in a bank, then 10% into a high risk investment account, you wouldn't be going on at them about wanting free lunches even if they get shit sandwiches, would you?

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Chinese Bitcoins ..

"Chinese Bitcoin exchange GBL has shut down, taking with it over 25 million yuan (£2.5m, $US4.1m) of investors’ money, in another warning to those who don’t look before they leap with the digital currency."

Will GBL be able to spend these Bitcoins or will the blockchain declare them invalid, or what?

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Anonymous Coward

Re: Chinese Bitcoins ..

where there ever actually any bitcoins, rather than an email saying "thank you very much for the payment. your funds are now invested in $20000 of bitcoins. we expect value to rise in near future" ?

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Re: Chinese Bitcoins ..

It's not completely unheard of for major players like MtGox to reject bitcoins known to be stolen, but nothing like that is built into the blockchain or bitcoin network itself. Such a feature would of course be a double-edged sword, especially since it's not exactly clear who would be wielding it.

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Anonymous Coward

Backups ?

Can't you backup your wallet to a local file if needs be ?

My £30 worth of bitcoins (well I bought £30 worth, they are now worth £134 - and I have spent some too :) ) are lodged with blockchain, but they are supposedly encrypted.

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Re: Backups ?

So can you ever actually turn it into real money? The kind you can actually buy a pint with?

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Re: Backups ?

There's a small pub chain that will let you buy beer *directly* with bitcoins: http://www.individualpubs.co.uk/bitcoin.html

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Anonymous Coward

Re: Backups ?

> There's a small pub chain that will let you buy beer *directly* with bitcoins

I also saw a couple of places in Central Europe a few days ago, which obviously attracted my attention.

I guess the answer is yes, you can actually buy beer with bitcoins, if you don't mind a bit of travel.

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Anonymous Coward

Re: Backups ?

> I guess the answer is yes, you can actually buy beer with bitcoins, if you don't mind a bit of travel.

Still, probably easier to pay in Bitcoins than with AMEX. :-/

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Re: Backups ?

You certainly can backup your local wallet. But if GBL works like every other bitcoin exchange I'm aware of, then in order to use it you have the send the coins to thier wallet. It's like a bank, you put in 2 bitcoins, and sure enough they tell you your balance is now 2 BTC... but it's only as good as their word.

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Anonymous Coward

How to make money out of Bitcoin

Offer to exchange Bitcoins for cash and cash for Bitcoins. Funds in either direction have to be paid up front by punters until cleared. Keep cash stocks high and Bitcoin stocks low, as exchange value of the latter fluctuates wildly. Wait until pending money stocks are sufficient to make it worth more doing a runner than continuing to collect commissions. That probably wont take long due to the low genuine circulation and high interest in speculation with most BTC to BTC transactions being to do with hiding the audit trail. This scenario seems to have happened quite a number of times with a number of fly by night Bitcoin exchanges.

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FAIL

419

I'm not clear why this destabalises Bitcoin anymore than 419 scammers destabalise traditional currencies. If you send your money abroad to...well...vaguely somehwhere, with a promise of vaguely something - what exactly would you expect to happen?

Doesn't matter whether it's Sterling, Euros, Dollars or Bitcoins.

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FAIL

The ponzi bird

Always comes home to roost...

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Bronze badge

Once again, Bitcoin is the Eve Online of currency.

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Thumb Up

ROTFLMAO

One more P.T. Barnum moment.

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Bah!

To paraphrase the American Guest in the Waldorf Salad episode:

"Never tried it. Never will".

I'm hoarding jars of pickles, cans of fruit & veg and barrels of nails. When it all goes tits up I'll be able to trade for whatever I need at premium exchange rates irrespective of the fiendish Chinese, scheming Russians and red-bottomed Chechnyan ladies infesting the interwebs.

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