Investors Fume Over Hounax Scam, Blame Fraudsters On YouTube And WhatsApp Groups

Over 130 Hong Kong citizens have fallen prey to a sophisticated cryptocurrency fraud, losing a staggering HK$120 million (US$15.4 million).

The victims expressed frustration, stating that the Securities and Futures Commission's (SFC) identification of the involved platform, Hounax, as suspicious came too late, as their funds were already ensnared in a deceptive investment scheme, South China Morning Post reported.

A 50-year-old maintenance worker, Ng, recounted how the scam unfolded over several months, luring him into a false sense of security.

He initially invested a small amount after verifying Hounax's legitimacy through various checks, only to be swindled out of HK$150,000.

"I only dared to invest because of these checks. Who knew it was still a scam after so many checks," he lamented.

Similarly, an accountant named Wong lost about HK$100,000 to the scam. She was drawn in by a YouTube channel and a WhatsApp group, both operated by the fraudsters.

Despite noticing some operational red flags, she was initially reassured by successful withdrawals and the company's registration as a "money services business" in the U.S. and Canada.

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The SFC added Hounax to its alert list on Nov. 1, but for many, this warning was too late.

The victims ranged in age from 19 to 78, with a 69-year-old woman suffering the largest loss of HK$12 million.

Lawmakers Doreen Kong Yuk-foon and Johnny Ng Kit-chong criticized the SFC's reactive approach and highlighted regulatory loopholes that allow unlicensed platforms to operate in a legal gray area.

"In a developed society such as Hong Kong, these things should not be happening," Kong stated, urging for more proactive measures.

The police, who received 88 reports involving 131 individuals, revealed that the scammers initially offered quick returns to gain trust.

However, when victims attempted to withdraw their funds, they were either denied or charged exorbitant "verification" fees.

The platform, falsely claiming to be operated by a Singaporean company, specifically targeted Hong Kong investors and began its operations earlier this year.

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