Two Suspects Were Arrested In Connection With MyCoin - Essay Example

At the moment, MyCoin is under investigation for running a Ponzi bitcoin scam and the Taiwan police caught two suspects who are believed to have a direct connection with MyCoin.

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There were many reports that stated that the scam was carried out by the two suspects along with few other which resulted in loss of millions of dollars in many of the Asian countries.

According to the investigation, the two suspects are – 47- year old Chen Yun- fei and 39- year old Lu Kuan- wei who was the former president of the Taoyuan Junior Chamber of Commerce.

China Times reported, “Chen and Lu held several events for investors convincing each one to spend NT $1.62 million (US$ 49,600) for 90 BTC and an account with MyCoin’s parent company, which would distribute 0.63 of a bitcoin every day for a total value of NT $11,000 (US $337).

The investors were told that their investment would be returned to them after four and a half months.”

Further reports stated that the victims were deceived into investing with the help of the MyCoin platform by promising substantial result in return.

They promised the investors cash prizes or a Mercedes- Benz car if they were introduced to new clients. Unfortunately, this was nothing but a Ponzi scheme and all the winnings would be taken from the profit that was made by other people.

None of the investors were provided with a receipt and they were led to deposit their newly- acquired coins at a separate site in order to earn interest.

One local woman stated, “Everyone says they too are victims … but we were told by those at higher tiers [of the scheme] that we can get our money back if we find more new clients.”

It all started in February 2015, when all of sudden the Hong Kong -based bitcoin trading firm, MyCoin has shut all of its operations. It was reported that around $387 million of the client’s funds were missing.

In March of 2015, there were five arrests, who were supposedly involved in money laundering and crafting new events in order the increase the chances of investors.

One of them was a woman who was arrested when the police boarded a casino ship that anchored off North Point.

While the other four were arrested from their homes in Yuen Long, Tin Shui Wai, Wong Tai Sin and North Point. According to a source, four of the suspects were unemployed while the fifth suspect was an insurance agent.