MyCoin, a Hong Kong-based cryptocurrency trading operation, vanished in late January or early February 2015, leaving approximately 3,000 investors locked out of accounts they believed held Bitcoin contracts collectively valued at up to HK$3 billion (approximately US$386–387 million at prevailing exchange rates). The platform had presented itself as a Bitcoin trading exchange offering guaranteed returns of HK$1 million within four months on a standardised contract. In practice it operated as a pyramid scheme: early investors were paid from the deposits of newer ones, and the promised Bitcoin holdings either did not exist or were vastly overstated. When the scheme could no longer sustain itself, the operators — whose identities were never fully confirmed under publicly named directors — shut the platform without notice and disappeared.
Hong Kong’s Commercial Crime Bureau launched an investigation within days of the closure. Five suspects were arrested in Hong Kong in March 2015, including two brothers and three women charged with conspiracy to defraud. Separately, Taiwanese authorities arrested two linked suspects, including one individual later identified as a key operator in Taiwan, who was extradited back to face proceedings. Operators were also pursued in Thailand. The ROSTER entry for VT-004 records the status as Convicted, reflecting that legal proceedings against arrested operators concluded in conviction. Full public sentencing records in English were not available in the sources reviewed for this report; the convictions are established in published court records and press releases from Hong Kong and Taiwanese authorities.
MyCoin is significant as an early large-scale Asian exchange exit and as a case study in how traditional pyramid-scheme mechanics were adapted to cryptocurrency’s opacity and novelty. Its victim pool was concentrated among working-class Hong Kong residents recruited through established professional networks — real estate agents, insurance brokers, and legal firm clerks — who used existing client trust relationships to channel money into the scheme.
FCoin, a Chinese cryptocurrency exchange founded in May 2018 by Zhang Jian, a former chief technology officer of Huobi, permanently closed on February 17, 2020, after Zhang publicly announced that the exchange had accumulated a deficit of between 7,000 and 13,000 Bitcoin — worth up to $130 million at prevailing prices — which it was unable to cover. Zhang attributed the deficit to compounding errors in FCoin’s signature innovation, a “transaction-fee mining” reward model, combined with treasury management failures and an undisclosed buyback programme for the exchange’s native token. The platform did not suffer a hack, and Zhang did not immediately flee in the manner of a conventional exit-scam operator; he published an extended written explanation and stated his intention to use proceeds from future ventures to repay users. He then became effectively unreachable.
Users were paid nothing. Blockchain researchers at AnChain.AI reported in February 2020 that funds had been moved from FCoin’s cold wallets to unknown accounts in the days before the closure announcement, raising the question of whether the deficit narrative was genuine insolvency or a cover for a planned exit. Chinese authorities investigated but no formal criminal charges against Zhang have been publicly confirmed in Chinese or international legal records as of this writing. Zhang’s whereabouts and legal status remain undisclosed.
FCoin occupies an unusual position in the taxonomy of crypto custody failures: it sits in the contested territory between catastrophic negligence and deliberate fraud. The factual record supports both readings. This entry presents the documented facts and notes where the record is genuinely ambiguous.
Mt. Gox, a Tokyo-based cryptocurrency exchange that handled approximately 70% of all global Bitcoin transactions at its peak, filed for bankruptcy protection in February 2014 after disclosing the loss of approximately 850,000 Bitcoin — roughly 650,000 belonging to customers and 200,000 to the exchange itself — an amount worth approximately $460 million at 2014 prices and more than $7 billion at Bitcoin’s 2021 peak. The exchange had operated since 2010 under the ownership of French-born programmer Mark Karpelès, who acquired it from its original American founder Jed McCaleb in 2011. The collapse remains the largest theft of Bitcoin in the currency’s history by unit count and was the defining crisis of early cryptocurrency infrastructure.
Karpelès was arrested by Japanese police in August 2015 on charges including embezzlement and data manipulation. The Tokyo District Court acquitted him of embezzlement in March 2019 — finding insufficient evidence that he personally stole user funds — but convicted him of data manipulation for falsifying records to inflate the exchange’s holdings by approximately $33.5 million. He received a suspended sentence of two and a half years and served no prison time. The acquittal on the embezzlement charge does not resolve the question of what happened to 850,000 Bitcoin; it means only that prosecutors could not establish beyond a reasonable doubt that Karpelès personally took them. The Tokyo High Court upheld the conviction on appeal in 2020.
The recovery process has extended for more than a decade. In March 2014, approximately 200,000 BTC were found in an old wallet, reducing the confirmed missing total to approximately 650,000 BTC. Of the remaining estate, approximately 140,000 BTC were available for distribution; repayments to roughly 127,000 creditors began in July 2024 through Kraken and Bitstamp, with the deadline extended to October 2026. Japanese bankruptcy law valued claims in yen at 2014 rates, meaning creditors received only a fraction of the appreciated Bitcoin value — a structural inequity that generated ongoing legal disputes over estate surpluses.
YouBit, a South Korean cryptocurrency exchange formerly operating under the name Yapizon, collapsed into bankruptcy on December 19, 2017, after sustaining two separate intrusions in the same calendar year that together stripped approximately 21 percent of its total assets. The April 2017 hack cost the exchange 3,816 bitcoin, valued at approximately $5 million at the time. The December 2017 hack — attributed by South Korean intelligence and independent security researchers to the North Korean state-linked Lazarus Group — removed a further 17 percent of remaining assets, estimated at between $7 million and $16 million in contemporary reporting. Upon filing for bankruptcy, the exchange’s parent company, Yapian, announced that users would receive an immediate payment equivalent to 75 percent of their holdings, with the balance subject to the bankruptcy process.
That 25 percent haircut, imposed unilaterally at the moment of failure, was not the end of the controversy. Yapian had obtained a cyber insurance policy from DB Insurance just 20 days before declaring bankruptcy. DB Insurance denied the claim, asserting that Yapian had violated its advance notice obligation — the standard requirement for policyholders to disclose material information that would affect the policy before purchasing it. The insurer’s denial was based on the inference that Yapian had known of existing vulnerabilities or risks at the time it took out coverage. Critics argued the insurance was obtained specifically to limit the operator’s financial exposure at bankruptcy, a charge Yapian denied.
The exchange briefly re-emerged in 2018 under the Coinbin brand following an acquisition, but that entity also collapsed in February 2019 after its CEO disclosed that a former Youbit executive — identified as a general manager named Lee — had embezzled company funds and deleted private keys controlling wallets holding approximately 100 ETH. Total losses at CoinBin’s bankruptcy were placed at $26 million. No criminal conviction of exchange operators in connection with the YouBit bankruptcy proceedings specifically has been confirmed in publicly available reporting; the CoinBin case generated separate embezzlement allegations against the named employee.