Hong Kong Police Receive 145 Complaints of Hounax Crypto Scam Totaling $18.9M

Trent Alan
Last updated: | 2 min read
Hounax scam
Hong Kong authorities confirm 145 victims and nearly $19 million lost in crypto scam involving unlicensed exchange Hounax. Image by Alexey Novikov, Adobe Stock.

Authorities in Hong Kong have confirmed that 145 individuals filed complaints regarding losses from an unlicensed cryptocurrency exchange called Hounax. Police report the total losses amount to around $18.9 million.

Earlier this month, the Hong Kong Securities and Futures Commission (SFC) cautioned users about the suspicious trading platform. According to authorities, Hounax falsely claimed to have licenses and backing from legitimate financial institutions.

Details of the Hounax Crypto Scam

On November 25th, Hong Kong police held a press conference announcing the complaints against Hounax. They revealed that as of November 27th, 18 people had come forward reporting losses ranging from $1,539 to $1.2 million HKD (Hong Kong dollars).

Inspectors said Hounax recruited unsuspecting crypto traders through social media and messaging apps. The scam prompted victims to invest in virtual currencies through the Hounax app with promises of high returns.

According to inspectors, the moment victims transferred funds to Hounax, the money was siphoned away. Withdrawal attempts were rejected or met with demands for verification fees of up to 80% of the original funds.

Over $18.9 Million in Losses Reported

The reported losses from all 145 Hounax users now total around 148 million HKD, equivalent to $18.9 million USD. Police say the victims range in age from 19 to 78 years old.

The largest reported individual loss belonged to a 69-year-old retired woman who was scammed out of $1.54 million HKD, nearly $135 thousand USD. Authorities say none of the victims met the Hounax scammers in person.

This compounds the ongoing issues with unlicensed crypto exchanges in Hong Kong this past year. Back in September, the JPEX exchange scam affected over 2,500 victims with losses surpassing $192 million.

Hong Kong Focuses Efforts on Curbing Unlicensed Exchanges

In light of these troubling events, Hong Kong regulators seek to tighten oversight of cryptocurrency trading platforms to avoid further incidents. Just last month, the SFC published a warning list of suspicious crypto exchanges that included Hounax.

For now, authorities say the one-year grace period for platforms to register with Hong Kong regulators will remain unchanged. But officials emphasize the need to accelerate efforts to root out unlicensed businesses wrongly portraying themselves as legitimate.

As law enforcement pursues the entities behind the Hounax scam, regulators continue working to implement more robust framework for governing cryptocurrency markets. This aims to strike a balance between innovation and consumer protection in a rapidly evolving landscape.