Hong Kong Hit by $18.9M Crypto Exchange Scam: The Aftermath

• Hong Kong Police Uncover $18.9 Million Crypto Scam
• Hounax - A High Risk Crypto Platform
• Allegations Against Hounax
• Continued Investigation and Upcoming Arrests
• Recent Scams and Uncertain Climate

Hong Kong Police Uncover $18.9 Million Crypto Scam

The Hong Kong police department disclosed on Sunday that a crypto scam run by the unauthorized exchange Hounax resulted in the theft of approximately 148 million Hong Kong dollars ($18.9 million) from victims. As of November 27, authorities received 145 reports of losses from the Hounax platform. The individual losses vary, ranging from 12,000 HKD to 10 million HKD ($1,539 to $1.2 million). This information was confirmed by the Hong Kong Securities and Futures Commission (SFC).

Hounax - A High Risk Crypto Platform

Hounax received an initial warning from local police during a press conference last week after multiple fraud complaints were filed. The SFC, earlier this month, classified Hounax as a high-risk crypto platform and warned investors to be cautious.

Allegations Against Hounax

Investigators allege that Hounax used false claims to continue attracting customers in Hong Kong. Authorities suggest that the exchange tricked victims by claiming that it collaborated with licensed financial institutions, was created by the original Coinbase technical team, and possessed a Canadian regulatory license. Officials revealed that Hounax also utilized social media channels to attract local investors by advertising non-existent venture capital support from reputable companies like Sequoia Capital and IDG Capital.

Continued Investigation and Upcoming Arrests

The chief inspector of the Commercial Crime Investigation Section announced that additional arrests are anticipated as investigations move forward. The SFC's warning list currently includes nine suspicious crypto platforms, with the recently added Hounax.

Recent Scams and Uncertain Climate

The current scam mirrors a larger controversy earlier this year that involved the Hong Kong exchange JPEX, which led to over $180 million in reported losses and 66 arrests to date. Victims of the Hounax scam seeking assistance or information about recovery efforts are advised to contact the Commercial Crime Investigation Section. As regulations continue to evolve, cryptocurrency investors in Hong Kong are dealing with an uncertain and potentially dangerous environment.

Edited by Jonathan Stoker