Second Crypto Scam Rocks Hong Kong, Over HK$120 Million Lost to Hounax

Second Crypto Scam Rocks Hong Kong, Over HK$120 Million Lost to Hounax

by November 29, 2023

The Hong Kong police have initiated an investigation into Hounax, a cryptocurrency trading platform, after 131 individuals reported losing a total of HK$120 million (US$15.4 million) in what is suspected to be a fraudulent scheme. This news was initially reported by South China Morning Post.

The victims, ranging in age from 19 to 78, include a 69-year-old retired woman who reportedly lost HK$12 million.

Chan Wai-kei, a superintendent with the Hong Kong police’s commercial crime bureau, explained that the alleged scam involved luring investors to put money into cryptocurrencies through Hounax. However, when these investors attempted to withdraw their funds, they found it impossible.

Earlier this month, the Securities and Futures Commission (SFC) of Hong Kong had already flagged Hounax as a dubious entity in the virtual asset trading space. According to the SFC, Hounax falsely claimed associations with a financial institution and a venture capital firm.

The SFC’s website highlighted that Hounax seemed to specifically target Hong Kong investors, as indicated by its user login page and its presence on social media channels branded as ‘Hounax Hong Kong’.

This is the second major crypto scandal to rock Hong Kong following the JPEX fiasco where 2,623 people had reportedly lost around HK$1.6 billion. The Hong Kong Press reported that 66 people have been arrested so far but no one has been charged yet.

The Hong Kong’s Securities and Futures Commission (SFC) has yet to issue an official statement with regard to this latest development.