A notable number of Hong Kong investors reportedly fell victim to a scam by a cryptocurrency trading platform known as Hounax. The ill-fated affair ended with a loss that exceeds $15 million. Many of the victims claim the city-state regulator’s admonition about the potential perils of the platform emerged too late, as their investments were already entrenched in Hounax.
Hounax allegedly fooled approximately 131 investors, who aged between 19 and 78, creating a sizable and diverse victim pool. Numerous reports were lodged with the Hong Kong Police and the Securities and Futures Commission (SFC) concerning Hounax. The overall loss is documented to be around HK$120 million ($15.4 million), surprisingly the individual who allegedly suffered the most significant loss was a retired 69-year-old woman who invested HK$12 million ($1.54 million), which amounts to 10% of the total funds lost.
Victims like Ng have vocalized their grievances; claiming that the crafty scammers won their trust via various clever tactics. Notably, investors found confidence in Hounax being listed as a “money service business” in Canada and the U.S.. It was in November when the investors discovered they were unable to withdraw their funds, leading them to approach the authorities.
While the Hong Kong Securities and Futures Commission (SFC) included Hounax on its alert list on Nov. 1, pointing out their dubious methods of enrolling Hong Kong investors, the victims lamented that the regulator’s warning was too late. Others like legislators Doreen Kong Yuk-foon and Johnny Ng Kit-chong, have also criticised the timing of SFC’s public warning.
This incident follows after a similar debacle involving JPEX, where authorities were met with over 2,000 complaints from victims alleging to have also lost their funds. Further investigations and arrests related to the cryptocurrency conundrums are ongoing both in Hong Kong and Taiwan.