Arrests made in alleged Bitcoin scam in Hong Kong

On Thursday, Hong Kong police arrested five people for conspiracy to defraud after more than 50 clients of a local Bitcoin trading company complained they had been swindled out of $75 million HKD, reported the South China Morning Post.

The five suspects – two men and three women between the ages of 34 and 55 – were being held for questioning and none of them had been charged, said the newspaper.

Police began an investigation after receiving complaints last month from dozens of investors in MyCoin, a Bitcoin trading platform. The complainants told police they invested in Bitcoin trading through MyCoin since last year, according to police.

“They claimed their accounts were not in operation since December last year,” said a police spokeswoman to the Post. “They were unable to make withdrawals from their accounts and could not continue trading since December last year. They suspected they had been cheated.”

In addition to the five individuals arrested Thursday, police are still searching for a number of other individuals connected to the case, reported the Post. “They include former and current directors and shareholders of the investment company involved.”

While police refused to name the company, clients identified it as Rich Might Investment.

The Post reported that Companies Registry records show that William Dennis Atwood resigned as director of Rich Might last November before the company amended trading rules to stop investors from cashing in all their Bitcoin. Atwood transferred all of his shares the day he resigned to a British Virgin Islands-based company called Fascinating Horizons Overseas.

According to the records, a woman named Wong Lok-yan replaced Atwood as director, later resigning on January 28.

In January, the company posted a notice at its office stating it would be closed for renovation. Some investors alleged the closure of the company may have cost investors a total of $3 billion HKD.

The investors allege MyCoin was a pyramid scheme packaged as trading in Bitcoin. The case had Hong Kong lawmakers calling on authorities last month to ban the digital currency.