According to Cointelegrah: Hong Kong authorities have reported that 145 users fell victim to a massive scam perpetrated by the unlicensed cryptocurrency exchange, Hounax, leading to losses up to 148 million Hong Kong dollars ($18.9 million). The scam was first reported by the local media outlet, Shenzhen Commercial News.
On November 25, local police informed Hounax of the allegations through an initial press conference. Subsequently, as of November 27, the Hong Kong Securities and Futures Commission (SFC) received 18 complaints regarding the exchange, with losses ranging from 12,000 HKD to 10 million HDK ($1,539 - $1.2 million).
Authorities explained that Hounax, purportedly set up by the original Coinbase tech team and licensed by Canadian authorities, duped local customers. The cryptocurrency exchange also suggested ongoing talks for potential investments with Sequoia Capital and IDG Capital.
Ke Yongn, the Chief Inspector of the Commercial Crime Investigation Section of the Hong Kong Police, disclosed that Hounax deployed social media means to attract victims. However, its official Facebook page has since been taken offline.
The SFC's list of dubious crypto investment platforms includes nine names, including Hounax, JPEX, Hong Kong Digital Research Institute, BitCuped, FUBT, futubit/futu-pro, EFSPD, OSL trading, and arrano.network.
Earlier in 2023, Hong Kong's JPEX exchange became mired in a significant scandal, receiving over 2,000 complaints and reporting $180 million in associated losses. The fraud led to the arrest of 66 individuals.
Responding to these unfortunate incidents, local regulators are tightening the reins on crypto regulation to prevent further crises. However, the country's one-year grace period for crypto exchanges remains unaffected.