Hong Kong cryptocurrency exchange Hounax scammed consumers out of $15.four million

Financial authorities in Hong Kong have issued a warning about Hounax, an exchange deemed by a lot of to be no diverse from a copy of JPEX.

Hong Kong cryptocurrency exchange Hounax scammed consumers out of $15.four million

Second Wu BlockchainOn November 25, 2023, Hong Kong Police uncovered a fraud situation associated to the Hounax cryptocurrency exchange platform, recognized as a copy of JPEX, with the sum of cash defrauded from consumers reaching up to H$120 million Kong (equivalent to 15.four million US bucks).

Even if prior to, Hong Kong Securities and Derivatives Commission (SFC) issued. notices and lists Hounax is a suspicious exchange, but as of 4pm on November 27, 2023, Hong Kong police had obtained reviews from 145 victims of residence reduction in the incident.

In the information shared by the newspaper South China Morning PostScam victims explained they lowered their guard when Hounax’s (now deleted) web site and Facebook account falsely claimed that traders behind the exchange integrated: Coinbase, Sequoia, Goldman Sachs, and so forth. and corporate partners like Ethereum, Tron, Cardano, and so forth. .

At the very same time, Hounax victims had been “clouded” by the guarantee of revenue of up to forty% per yr as bait to lure consumers to join the exchange. As a end result, traders can’t recover their capital and revenue following a lot of months due to the fact this exchange has been banned from withdrawing cash because September 2023.

When consumers needed to make withdrawals, scammers posing as “financial experts” gave several causes for the refusal, like assets that had been investigated by anti-cash laundering authorities, consumer accounts blocked for trading functions… And we will not prevent right here, These victims also stated that their individual and household financial institution accounts have to go by means of a verification system prior to withdrawing cash with costs that can go up to 80% of the withdrawal sum.

Many angry consumers explained the SFC issued its warning about Hounax as well late and criticized Hong Kong’s Financial Conduct Authority that it ought to have acted sooner to shield traders.

Responding to the criticism, the SFC stated:

“Alert implemented and Hounax listed list unlicensed corporations and suspicious web sites promptly following getting complaints… but Hounax is unregulated and not licensed by the SFC, so it has no authority to suspend the operation of the platform.

We have also exchanged data with the police about the Hounax incident and they are investigating.”

A listing of unlicensed corporations and suspicious web sites is listed by the SFC on the household webpage

Immediately following the incident, Hong Kong lawmakers like Johnny Ng alias Wu Jiezhuang argues that the SFC ought to be fast to speak to unlicensed cryptocurrency trading platforms to recognize “adverse” problems, as a result issuing warnings or early halting choices on suspicious platform action to protect against dangers.

This is the 2nd Hong Kong cryptocurrency exchange to be investigated following the preceding “JPEX scandal” in September 2023, Bring to arrest a associated KOL.

The JPEX crash induced Hong Kong’s fiscal regulator has been forced to publish a listing of cryptocurrency exchanges requiring working licenses and set up a process force to keep track of virtual asset trading platforms (VATPs).

Hong Kong is a nation with a lot of favourable moves in the discipline of digital assets. After two months from application “Open” politics with cryptocurrencyTill now there are two exchanges authorized to supply cryptocurrency trading in Hong Kong for personal traders: HashKeys and OSLs. More lately, Hong Kong also “welcomed” a new cryptocurrency fund with investment capital of up to $one hundred million.

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