Hong Kong Investors Lose $15M in Alleged Crypto Scam

Hong Kong Investors Lose $15M in Alleged Crypto Scam

Hong Kong investors face another setback with Hounax, a crypto trading platform, allegedly scamming victims out of over $15 million. Approximately 131 investors, ranging from 19 to 78 years old, fell prey to the scam, with some claiming the Securities and Futures Commission’s (SFC) warning came after they had already invested in Hounax. The Hong Kong police received 88 complaints on Nov. 25, and the SFC received 15 on Nov. 27 regarding the incident. The reported loss is around HK$120 million ($15.4 million), and a 69-year-old retired woman is said to have suffered the largest loss, investing $HK12 million ($1.54 million) or 10% of the total funds. Victims reported that the alleged scammers created trust by demonstrating withdrawal capabilities and claimed Hounax was listed as a “money service business” in Canada and the United States. However, investors faced withdrawal challenges in November after the platform required them to lock up funds until Nov. 12, leading to police reports.

The Hong Kong Securities and Futures Commission (SFC) flagged Hounax as a “suspicious virtual asset trading platform” on Nov. 1. The SFC revealed that Hounax falsely claimed to have business cooperation with a financial institution and a venture capital firm. Despite the regulator’s warning, some investors criticized the timing, stating it came too late as they had already invested in Hounax. Lawmakers Doreen Kong Yuk-foon and Johnny Ng Kit-chong expressed dissatisfaction with the SFC’s public warning, suggesting it could have been issued earlier.

This incident follows the JPEX saga, where authorities received over 2,000 complaints from victims who lost funds to the company. Hong Kong has witnessed several arrests in connection with JPEX, while Taiwanese police apprehended the chief JPEX partner in Taiwan based on complaints from 10 customers. The crypto investment landscape is raising concerns about investor protection and regulatory response times.


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