Hong Kong Authorities Report $18.9 Million Loss in Crypto Scam
Hong Kong authorities have announced that 145 users were affected by a scam involving the unlicensed cryptocurrency exchange Hounax, resulting in a loss of $18.9 million. The Hong Kong Securities Regulatory Commission (SFC) received 18 complaints about the exchange, with amounts ranging from $1,539 to $1.2 million.
Fraudulent Claims and Social Media Recruitment
Hounax falsely claimed to be a licensed platform and attracted local customers by stating it was founded by the original Coinbase technical team and had licenses from Canadian authorities. The platform also claimed to be considering investments from big names like Sequoia Capital and IDG Capital. It utilized social media to attract victims, although its official Facebook page is no longer online.
Other Suspicious Platforms and Previous Scandal
The SFC has listed nine suspicious crypto investment platforms, including Hounax and JPEX. Earlier this year, the JPEX exchange was involved in a major scandal that resulted in over $180 million in losses. Sixty-six individuals have been arrested in connection with the JPEX scandal so far.
Tightening Regulations
These incidents have prompted local regulators in Hong Kong to tighten crypto regulations to prevent further industry catastrophes. However, they have stated that the country’s one-year grace period for crypto exchanges will remain unchanged.
Hot Take: Hong Kong Hit by Another Crypto Scam
Hong Kong continues to grapple with cryptocurrency scams as another unlicensed exchange, Hounax, defrauds users of $18.9 million. The fraudulent platform made false claims about its licensing status and used social media to attract victims. This incident follows a previous scandal involving the JPEX exchange, which resulted in over $180 million in losses and numerous arrests. Local regulators are now tightening crypto regulations to prevent further scams, but the grace period for crypto exchanges remains unchanged. It is crucial for crypto investors to exercise caution and only engage with licensed and reputable platforms.
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