Although the SFC issued a warning about the Hounax cryptocurrency trading platform in November, victims said the regulator acted too late.
Following the JPEX fiasco, another cryptocurrency trading platform called Hounax reportedly defrauded some Hong Kong investors, causing them to lose more than $15 million.
Meanwhile, some victims believe that the city-state regulator issued a warning about the platform only after they had already locked their funds in Hounax.
Hounax cryptocurrency exchange suspected of disappearing with customer funds
About 131 so-called investors, aged between 19 and 78, fell victim to Hounax’s alleged cryptocurrency scam. According to the South China Morning Post, the Hong Kong police received 88 complaints from victims on November 25, of which the Securities and Futures Commission (SFC) received 15 complaints involving Hounax on November 27.
While the losses were said to be around HK$120 million ($15.4 million), the biggest victim was reportedly a 69-year-old retired woman who invested HK$12 million ($1.54 million) or 10% of her total funds.
According to an affected person named Wu, the scammers behind the cryptocurrency exchange built trust with unsuspecting victims and had accomplices claiming (and demonstrating) that they could withdraw funds from the platform.
Ng and another investor, whose surname is Wong, said they felt relieved when they realized Hounax was listed as a "money services business" in Canada and the United States, and they were able to withdraw their funds in September.
However, trouble began when investors realized they could not withdraw their funds in November. The cryptocurrency platform had an investment agreement that required investors to lock in their funds by November 12. But victims claimed they were unable to withdraw their funds after the deadline, leading them to file a police report.
The Securities and Futures Commission is late in warning and laments the victims
Hong Kong’s Securities and Futures Commission (SFC) designated Hounax as a “suspicious virtual asset trading platform” on November 1. According to the SFC:
“The company claims to be a cryptocurrency trading platform with business partnerships with a financial institution and a venture capital firm, but this is not the case. It appears to be targeting Hong Kong investors by pre-populating the +852 segment on its user login page and the “Hounax Hong Kong” social media channels on Facebook, X (formerly Twitter), and YouTube.”
But as described in the report, some people who put money into Hounax lamented that the regulator’s warnings came too late, after they had already engaged with the company and locked in their investments.
Separately, two Hong Kong lawmakers, Kong Yuk-fan and Ng Kit-chung, said the SFC’s public warning was not enough, with Ng saying the warning could have been issued earlier.
The latest development comes shortly after the JPEX incident, with authorities receiving more than 2,000 complaints from victims who claim they lost funds from the company.
While several arrests have been made in Hong Kong, Taiwanese police have also arrested JPEX’s lead partner in Taiwan following complaints from 10 customers. #香港 #加密欺诈
