MyCoin was supposed to be a bitcoin exchange and gathered enough interest to claim 3,000 customers investing $128,966 each. They made sure to leave no paper trail, as often happens with bitcoin scams. When they left, citizens of Hong Kong that invested were without any recourse in the situation.
In response, Chinese lawmakers are pressuring authorities to ban bitcoin outright altogether.
Lawmakers Leung Yiu-Chung and James To are among the few that are putting pressure on the authorities to pass a ruling. China has always been on the fence in regards to bitcoin, mostly keeping a far away, yet watchful, eye on its developments.
Speaking with Reuters, Leung said the following:
“The government should not just stand aside. It’s simply not enough to just ask people to exercise caution when investing … it has to ban the circulation of such virtual currency in the market.”
With all due respect, banning bitcoin is the wrong response.
Bitcoin didn’t cause the ponzi scheme. The protocol is secure, and bitcoin’s use as a monetary function isn’t in jeopardy. People should be asked to exercise caution when investing in anything, but clearly they did not in this instance. It’s not something that goes without sympathy, however.
According to Reuters, a middle-aged woman from Hong Kong who invested in MyCoin did so by re-mortgaging her apartment. She invested HK$1.6 million, with hopes and dreams that she could one day afford to start her own business. Now that MyCoin is out of the picture, she simply lost all of that money.
Surprisingly enough though, the MyCoin scandal apparently has little to do with bitcoin at all. There may be no evidence that the exchange ever even held bitcoin, let alone kept all of the invested money in digital currency. Hong Kong authorities banning bitcoin would be an outright blatant disregard to the facts in this case.
Randall Arthur, a lawyer in Hong Kong, believes it would be wrong to take the anger and sadness surrounding this recent scam out on bitcoin itself. Speaking with IBTimes UK, Arthur said the following:
“There has undoubtedly been confusion in the media amongst the public about the scheme. Bitcoin trading was just used as a front for the scheme, when in reality bitcoins were never traded – the investors never held bitcoins or any other investments at all. The scheme could just have easily promoted itself using other investment opportunities – shares, securities, bonds, forex, et cetera. The outcome would have been the same.”
If lawmakers in Hong Kong believe banning a currency because of a company’s actions is the correct process, then it’s certain that every other currency would fall under the same legislation.
Photograph from Wikipedia.