Another cryptocurrency mining scam has popped up as the founder of a Hong Kong-based company disappears with $2.5 million.
With the coming of another week, we get news of yet another scam associated with cryptocurrency mining. Residents of Macau, a region that lies across the Pearl River Delta from Hong Kong, have complained to law enforcement that the founder of a crypto mining company has disappeared, taking with him HK$20 million (or roughly $2.5 million USD).
Broken Promises
Dennis Lau is the founder of Forger Esports, a Hong Kong-based company specializing in eSports (think League of Legends) and IT supplies. Apparently, the company decided to move into cryptocurrency mining.
Last January, Forger Esports participated in a seminar at the office of the Macau Civil Servants Association where they touted the financial gains of crypto mining. The company told attendees that it was planning on developing a comprehensive operation that would earn roughly HK$200,000 (about $25,500 USD) a month. Investors would gain a fixed return.
It appears that everything started smoothly at first, but in July, the promised returns were not paid. Attempts to contact the company’s founder were ignored. Dennis Lau has since disappeared, taking the investment funds with him. Investors contacted the police, and from all accounts, investors are owed a total of HK$50 million (over $6.3 million USD) based upon the initial investment and promised returns.
The Monetary Authority of Macao (AMC) has issued a statement showcasing the usual FUD that many governments throw at Bitcoin and other virtual currencies. The statement says:
Any trading of these commodities involves considerable risks, including but not limited to those relating to money laundering and terrorism financing, against which all participants should remain vigilant. The AMCM has also reminded all the banking and payment institutions in Macao not to participate in or provide, directly or indirectly, any financial services for the related activities.
Crypto Mining in the News
It’s been a busy last few weeks for Bitcoin miners. Back in June, Apple banned apps that included cryptocurrency mining, unless it was being done off the device (such as being cloud-based). Captain Kirk, William Shatner, became the face of a Bitcoin mining company in Vancouver, Canada.
In China, law enforcement arrested a man who stole $15 million from customers seeking to buy Bitcoin mining machines. The increased demand for the machines eventually outstripped the man’s ability to pay for them, leaving him unable to fulfill his orders at the promised price.
While the FUD continues that cryptocurrency miners are destroying the environment with their rapacious power consumption, another study says that miners are only using just over half of the estimated power being used.
Just last week, the CEO of a Vietnamese mining company fled to the United States with $35 million in stolen funds. Apparently, the decline in the value of Bitcoin caused all the profits to dry up. One wonders if the same situation impacted the Hong Kong-based Forger Esports as well. So far, no official reason for the absconding has been issued.
Have you invested in a cryptocurrency mining venture? Did it pay off? Let us know in the comments below.
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