The Hong Kong Police have launched an investigation into the cryptocurrency trading platform Hounax. This action comes after reports from 131 people claiming losses totaling approximately HK$120 million ($15.4 million), as stated in a recent South China Morning Post article. The demographic of the alleged victims is broad, spanning ages 19 to 78, highlighting the wide reach of the platform’s influence. Notably, among these victims is a 69-year-old retired woman who has suffered a substantial financial setback of HK$12 million, underscoring the severity of the situation.
Superintendent Chan Wai-kei of the Hong Kong Police’s Commercial Crime Bureau explained that the investors were drawn into the scam with promises of profitable crypto investments. However, they found it impossible when they attempted to withdraw their funds.
Regulatory Warnings Preceded Investigations
Before this investigation, the Securities and Futures Commission (SFC) of Hong Kong had already flagged Hounax as a suspicious entity. The SFC’s website indicated that Hounax misrepresented itself as a cryptocurrency trading platform in collaboration with a financial institution and a venture capital firm. The SFC’s concerns were heightened by the platform’s focus on Hong Kong investors, as evidenced by the pre-populated +852 field on its login page and its active presence on local social media channels.
Johnny Ng, a Hong Kong lawmaker, emphasized the need for the SFC to proactively engage with unlicensed crypto trading platforms to identify and mitigate potential risks. He expressed these views in a recent interview with Now.com.
This investigation into Hounax follows close on the heels of the Hong Kong authorities’ September probes into JPEX, another crypto trading platform. The police have received complaints from 2,623 individuals in the JPEX case, involving about HK$1.6 billion. In connection with this case, 66 arrests have been made.
Additionally, Taiwanese authorities have taken action against JPEX Taiwan. The chief partner of JPEX Taiwan and a lecturer were detained on suspicions of violating banking and anti-money laundering laws.
These ongoing investigations underscore the increasing vigilance of Hong Kong authorities in the cryptocurrency sector as they strive to protect investors and maintain the integrity of the financial market.
Also Read: Hong Kong Regulators Limit Retail Access To Crypto Products
