Chinese bitcoin exchange vanishes along with $4.1m in bitcoins

Another bitcoin exchange has shut down, taking approximately $4.1 million worth of its clients’ bitcoins with it and, according to CoinDesk, foul play from its operator is suspected.

The name of the exchange is Global Bond Limited (GBL), and it was launched in May 2013. Despite being registered in Hong Kong, its server was located in Beijing – a fact that made some users suspicious (justifiably, as it turns out).

When it first started functioning, GBL was promoted as having received a licence to operate a digital currency exchange from the Hong Kong authorities. This also turned out to be a lie.

But, despite this and other suspicious things (evasive contact information on the site, information copy-pasted from other similar sites), it apparently managed to attract over 1000 users – mostly from mainland China – who have now lost their money, and likely have no legal recourse for getting it back.

The first hint that something has gone wrong was had on October 26, when the exchange’s site went offline. After the contact information on the site proved to be useless, and the address of the company’s offices was found to be false, the Hong Kong police was called in to investigate.

The advent of Bitcoin and other distributed, peer-to-peer digital cryptocurrencies has brought along some positive developments but also many challenges.

Digital currencies are not endorsed by national central banks, their price / value is prone to swinging wildly, and with cryptocurrencies such as Bitcoin, the main problem is that they can be easily stolen or lost when bitcoin exchanges get hacked or shut down by its operator for whatever reason.

There have been many instances of both, and the most recent incident happened only three weeks ago, when Bitcoin wallet service was allegedly hacked and 4,100 bitcoins were stolen.

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