Hong Kong police vow to make arrests after Hounax virtual asset trading platform allegedly tricks 131 people out of nearly HK$120 million

Hong Kong police launched an investigation on Saturday after more than 130 people claimed a virtual asset exchange platform called Hounax scammed them out nearly HK$120 million (US$15.4 million), with the force vowing arrests would be made soon.

The Securities and Futures Commission listed Hounax as a suspicious virtual asset trading platform early this month after it was found to have lied about its ties with a financial institution and a venture capital firm.

“The scammer impersonated investment experts and lured people to invest in virtual currencies through a virtual asset trading platform with promises of high returns,” said Chan Wai-kei, superintendent of the force’s commercial crime bureau. “But when the investors went to withdraw the money, they were unable to do so.”

Police recorded more than 4,300 investment scam cases in the first nine months of this year, a 115 per cent increase over the same period last year, with HK$2.8 billion lost. Photo: Jelly Tse

Chan said police received 88 reports from 131 alleged victims, who reported losing nearly HK$120 million. The youngest was 19 and the oldest 78, with a 69-year-old retired woman allegedly suffering the biggest loss of HK$12 million.

The platform, which claimed to be run by a Singaporean company, started operating early this year and appeared to target Hong Kong investors, he added.

Or Wing-yan, chief inspector of the bureau, said the alleged scammers would reach out to people through social media and WhatsApp, inviting them to join group chats in which “hot tips” were shared.

Those who showed an interest would be instructed to download the company app through a hyperlink and transfer funds to a third-party bank account to top up their investment account.

“In the beginning, the victims would see quick returns in the investment account, but those were just meaningless numbers made up by the scammers to gain their trust,” Or said. “In fact, the moment they transferred the funds to the third-party account, the money was transferred away.”

When victims tried to withdraw the money, the platform’s “investment managers” would reject the request with different excuses or charge them a “verification” fee of up to 80 per cent of their initial funds, claiming it was a requirement by an international anti-money-laundering organisation, the chief inspector said.

Even when the victims paid the fee, they still could not get the money back, she added.

“The ‘investment manager’ or the customer service people would simply disappear, and the victims would be kicked out of the group chat,” she said. “None of the victims met the scammers in person, and the third-party accounts that received the money were just stooge accounts … all these made the investigation more challenging.”

Chan said arrests would be made in the near future, adding police had asked telecoms companies and social media platforms to block the website and their accounts.

He noted that police recorded more than 4,300 investment scam cases in the first nine months of this year, a 115 per cent increase over the same period last year, with HK$2.8 billion lost.

Chan called on the public to remain vigilant and not blindly follow the opinions of so-called investment experts, warning that scammers would often pledge quick, high returns with minimal risk.