Police arrests Chinese Bitcoin exchange owners suspected of fraud

Three individuals allegedly involved in the recent ransacking of the Hong Kong-based Global Bond Limited Bitcoin exchange have been arrested in China.

According to a report by the Xinhua News Agency, the mastermind of the operation was a man who had apparently created the exchange in May 2013.

Other arrested suspects include a 24-year-old man who is thought to have been in charge of the platform’s daily operations, and a 33-year-old, in charge of the exchange’s financial management.

The three suspects have apparently been arrested mere weeks after the exchange was seemingly compromised and defaced, and consequently closed down. The exchange’s customers – mostly from mainland China – were almost immediately suspicious of the explanation offered by the operators.

The fact that the contact information on the site and the claim that GBL had received a license to operate a digital currency exchange from the Hong Kong authorities ultimately turned out to be bogus, were indications that this was likely a scam.

The investigation by the police was started after one of the exchange’s customers reported the theft of his Bitcoins, and is believed that the total losses experienced by the investors could reach up to 25 million yen (a little over $4 million).