Hong Kong Crypto Scam: Fraudulent Exchange Hounax Swindles Users out of $18.9M
Summary:
In a fraudulent operation by cryptocurrency exchange Hounax, 145 users in Hong Kong suffered a loss of 148 million HKD ($18.9 million). The Securities Regulatory Commission received 18 complaints about the exchange. Hounax falsely claimed to be a licensed platform that was established by the original Coinbase technical team. It was flagged as a suspicious platform by the Securities Regulatory Commission. Following earlier major scandals with crypto exchanges like JPEX, Hong Kong regulators have tightened crypto regulations.
Authorities in Hong Kong announced on the 27th of November that a fraudulent cryptocurrency exchange, Hounax, scammed 145 individuals, resulting in a financial setback of 148 million HKD ($18.9 million). This has been reported by the local Shenzhen Commercial News. The local police informed everyone about these misconducts on the Hounax platform in a press conference they held on the 25th of November. Reports from the Hong Kong Securities Regulatory Commission (SFC) indicated that they had received 18 complaints involving the exchange, with sums varying from 12,000 HKD to 10 million HDK ($1,539- $1.2 million). It was seen that Hounax falsely claimed to comply with legal financial institutions as a licensed platform, despite the SFC flagging it as a dubious platform and issuing warnings about the associated risks on the 1st of November. The platform allegedly lured local customers with assertions that it was established by the original Coinbase technical team, had Canadian authorities' endorsement, and was contemplating investments from heavyweights like Sequoia Capital and IDG Capital. Ke Yongn, the chief inspector of the Commercial Crime Investigation Section of the Hong Kong Police, disclosed that the platform enlisted the help of social media to attract victims. However, reports show that the platform's official Facebook page has disappeared. The SFC currently labels nine cryptocurrency investment platforms as suspicious, including Hounax, JPEX, Hong Kong Digital Research Institute, BitCuped, FUBT, futubit/futu-pro, EFSPD, OSL trading, and arrano.network. This incident surfaces after a significant scandal involving the JPEX exchange in Hong Kong earlier this year. The local authorities obtained more than 2,000 complaints from JPEX users and recorded about $180 million in losses. To date, 66 persons have been apprehended in connection with the scandal. This led the local Hong Kong regulators to introduce stricter crypto regulations to prevent another industry disaster. However, the regulators have reiterated that the one-year grace period for crypto exchanges will remain applicable.
Published At
11/28/2023 12:30:44 PM
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