Article Source:TECHUB NEWS
By Carl, Techub News
Recently, the news that the virtual asset trading platform HOUNAX was suspected of fraud has attracted widespread attention in Hong Kong. This is another virtual asset trading platform fraud case following the JPEX incident.
The HOUNAX case has once again triggered discussions among industry insiders on Hong Kong's virtual asset regulatory policy. Leung Fung-yee, CEO of the Hong Kong Securities and Futures Commission, said that fraudulent behavior does not mean major regulatory flaws, and that the HOUNAX fraud methods are consistent with traditional financial fraud.
145 people reported the case, involving a sum of 1.48 million yuan
On November 11, the Hong Kong police stated that as of 27 p.m., a total of 4 victims had reported cases, and the amount involved had increased to approximately HK$145 million.
The Hong Kong Securities and Futures Commission said that as of the 27th, it had received 18 complaints about HOUNAX, involving amounts ranging from HK$1.2 to HK$1000 million.
At present, the HOUNAX official website cannot be opened. According to the Hong Kong police, the HOUNAX platform began to operate in early 2023. The website used traditional Chinese to defraud Hong Kong citizens. On November 11, the Hong Kong Securities and Futures Commission tore up HOUNAX and included it in the list of unlicensed companies and suspicious websites, identifying it as a suspicious virtual asset trading platform, and most victims began to report the case.
According to the victims, some HOUNAX participants claimed to be investment experts and contacted the victims through various social media, inviting them to join the group and share stock and virtual currency investment analysis. Then, they asked the victims to download the mobile application and invest money.
At the beginning, the victim's account will show profit, but once a withdrawal is requested, HOUNAX will refuse with various excuses. Investors will be informed that they are being investigated by the anti-money laundering department and need to pay inspection funds before they can withdraw money, or they will be required to continue to pay a handling fee of 20%-80%.
A victim said that he lost HK$280 million on the HOUNAX platform and was asked to pay a fee when he tried to withdraw cash. After paying the fee, the platform said he had to wait 60 days before he could withdraw the money, or pay an account management fee and he could withdraw the money within five hours. So he chose to call the police.
Hong Kong police said many victims suffered losses in the stock market and were subsequently attracted by the platform's fraudulent return rate of up to 40%. The platform did not actually guarantee returns and was risk-free, which deceived investors.
CSRC: No major deficiencies in supervision
In September this year, a virtual asset trading platform fraud case, namely the JPEX case, occurred in Hong Kong. According to the latest news from the Hong Kong police, there are currently more than 9 cases involving more than 2600 billion yuan, and a total of 16 people have been arrested.
The JPEX incident caused a sensation in Hong Kong, triggering public doubts about Hong Kong’s virtual asset policies. At the same time, it is clear that industry insiders are worried that Hong Kong’s support for the development of the Web3 ecosystem will be shaken.
Recently, the HOUNAX case has also sparked similar discussions. In response, Hong Kong Securities Regulatory Commission CEO Leung Fung-yee said that the fraudulent behavior of virtual asset trading platforms does not mean that there are major deficiencies in supervision.
She said that before receiving the report, the Hong Kong Securities and Futures Commission had not paid attention to HOUNAX's activities in Hong Kong. HOUNAX's fraudulent methods are consistent with the usual methods of "pumping and dumping" in traditional financial market products. Therefore, the existence of fraud does not mean that there are major defects in supervision. The Securities and Futures Commission also continues to pay attention to the promotion of unlicensed trading platforms in Hong Kong on social media.
As for whether there should be a one-week grace period for virtual asset trading platforms to obtain licenses, Liang Feng said that even if the grace period ends, fraud cases will continue to occur, so measures such as the grace period will not be changed for the time being.
Wu Jiezhuang, the premier of the Hong Kong Legislative Council, suggested that Hong Kong should strengthen regulatory measures. He said that the regulatory authorities should work closely with the police to actively monitor and block suspicious platforms that the masses have access to, and publish the names of the relevant platforms. An official mobile phone application should be launched to find suspicious websites and software to remind citizens to avoid being deceived.
Investment Notes
The official website of the Hong Kong Securities and Futures Commission shows that in addition to HOUNAX, there are currently 8 other platforms included in the list of "suspicious virtual asset trading platforms", including Hong Kong Digital Research Institute, BitCuped, FUBT, futubit, EFSPD, JPEX, etc.
The latest addition to the list is Hong Kong Digital Academy, and the list details show that the platform claims to have obtained a license from the Securities and Futures Commission, but this is not the case.
The Hong Kong Securities and Futures Commission has warned consumers to be cautious and avoid trading with these platforms.
Industry analysts said that for investors, to protect their own interests, some precautions must be taken. First, investors should carefully study and understand the platform they intend to invest in, including its background, registration status and regulatory license, etc., to avoid scams. Secondly, investors should pay attention to high return promises and not be blinded by greed. Scammers often promise high returns quickly with minimal risk.
Mura founder and lawyer Wu Wenqian said that due to the large number of online platforms, it is impossible to detect all scams, so everyone should do their own research on platforms and products before investing.