Hounax scam: Hongkongers who lost HK$148 million to cryptocurrency platform say watchdog warning came too late
- Some victims of Hounax scam say watchdog issued warning over investment platform too late, as lawmakers call for shake-up to end ‘unregulated vacuum’
- ‘These scams are nothing new, but the [Hounax case’s] planning and execution were done so meticulously,’ one victim says after losing HK$100,000
Some Hong Kong residents caught up in an alleged HK$148 million (US$19 million) cryptocurrency scam said the securities watchdog’s warning came too late as lawmakers on Monday urged the government to close a legal loophole that enabled unlicensed platforms to trade within an “unregulated vacuum”.
But the Securities and Futures Commission (SFC) dismissed suggestions the incident involving cryptocurrency platform Hounax reflected serious shortcomings in the existing monitoring system, adding it needed time to investigate.
One of the victims said he had lowered his guard because Hounax appeared to have been recognised by international authorities. The man, surnamed Ng, 50, said the scam was well-executed and had been months in the making.
According to police, as of 4pm on Monday they had received reports from 145 people who said they had lost about HK$148 million. A 69-year-old retired woman allegedly suffered a loss of HK$12 million.
The SFC said it received the first complaint against Hounax in late September. It then launched an investigation the following month and added Hounax to its alert list of suspicious virtual asset trading platforms on November 1.
The watchdog said it had so far received 18 complaints concerning the platform, with investment amounts ranging from HK$12,000 to HK$10 million. The cases had also been filed with police, it added.
But a spokesman said: “The platform is unregulated and not licensed with the SFC. As such, the SFC does not have the power to cease its operation.”