Chinese Bitcoin Exchange Disappears, Along With £3 Million Worth Of BTC

Global Bond Limited (GBL), a Bitcoin exchange allegedly based in Hong Kong, has disappeared from the face of the earth, along with 30 million Yuan (£3m) it held in investments.

Since October 26, customers had been unable to access the website, or contact its administrators.

This ranks among the largest heists in Bitcoin history, which is full of similar incidents. Just last week, Australian BTC wallet Inputs.io was allegedly hacked, with more than £600,000 worth of bitcoins stolen.

The news had no impact on the price of bitcoins which continues to break records, trading as high as $419 (£262) on Mt Gox at the time of publication.

Daylight robbery

Bitcoins, or BTC, make up a decentralised virtual cryptocurrency commonly used online among people interested in keeping their transactions anonymous. It is not tied to any real money, but traded on various electronic exchanges to establish its price.

Bitcoin is based on an open-source, peer-to-peer Internet protocol, first introduced in 2009 by an anonymous developer known under the alias ‘Satoshi Nakamoto’. Recently, a number of major online businesses have started accepting BTC as a form of payment, including WordPress and Baidu, China’s largest search engine.

GBL was launched in May 2013, promising investors high returns by buying Bitcoins and selling them shortly after to minimise the risk. The strategy worked wonders as the price of the virtual currency was going through the roof.

It turns out the website never received an official licence to conduct business, despite its claims of being approved by the local government. GBL said it was based in the Special Administrative Region of Hong Kong; however, some of its customers had later tracked the servers to Beijing.

According to the local news agency IT Times, the administration of the website vanished without a trace, leaving behind an empty office and at least 500 devastated investors.

On October 26, the website started displaying a message that the service was compromised. Since then, none of the customer service contacts have been responding to messages.

Due to the decentralised nature of the currency, it is unclear whether the local law enforcement agencies are going to investigate the incident. In addition, it is notoriously difficult to track criminals that escape across the Hong Kong border and into the mainland China.

Meanwhile, the US authorities have ruled that the currency, even virtual, remains a currency and should be taxed. To this end, the Senate Homeland Security & Governmental Affairs Committee will hold a hearing entitled “Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies” on 18 November.

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