Hong Kong JPEX case reproduction: HOUNAX is suspected of fraud of more than 100 million yuan, and once claimed a return rate of 40%

作者：Carl，Techub News

Recently, the news of the alleged fraud of the virtual asset trading platform HOUNAX has attracted widespread attention in Hong Kong, which is another virtual asset trading platform fraud case after the JPEX incident.

The HOUNAX case has once again sparked public discussion on Hong Kong’s virtual asset regulatory policy, with Hong Kong Securities and Futures Commission Chief Executive Julia Leung saying that fraud does not mean major regulatory deficiencies, and that HOUNAX’s fraud methods are consistent with traditional financial fraud.

| 145 people reported the case, and the amount involved was 148 million

On November 27, the Hong Kong police said that as of 4 p.m., a total of 145 victims had been reported, and the amount involved had increased to about HK$148 million.

The Hong Kong Securities and Futures Commission said that as of the 27th, it had received a total of 18 complaints about HOUNAX, involving amounts ranging from HK$12,000 to HK$10 million.

At present, the official website of HOUNAX can no longer be opened. According to the Hong Kong police, the HOUNAX platform began to operate in early 2023, and the website used Chinese traditional Chinese to deceive Hong Kong citizens, and on November 1, the Hong Kong Securities and Futures Commission included HOUNAX in the list of unlicensed companies and suspicious websites, identifying it as a suspicious virtual asset trading platform, and then most of the victims began to report the case.

According to the victims, some HOUNAX participants claimed to be investment experts and reached out to the victims through different social media, inviting them to join groups and share their stock and virtual currency investment analysis. The victim is then asked to download a mobile phone app and put in the money.

In the beginning, the victim’s account will show a profit, but once a withdrawal is requested, HOUNAX will refuse under various pretexts, and the investor will be told that he will be investigated by the anti-money laundering department, that he will need to pay the verification funds before he can withdraw the money, or that he will be asked to continue paying a 20%-80% processing fee.

A VICTIM SAID THAT HE LOST 2.8 MILLION HONG KONG DOLLARS ON THE HOUNAX PLATFORM, AND WAS ASKED TO PAY A FEE WHEN HE WITHDREW HIS CASH, AND AFTER PAYING THE FEE, THE PLATFORM SAID THAT HE WOULD HAVE TO WAIT 60 DAYS TO WITHDRAW IT, OR PAY ANOTHER MANAGEMENT FEE, AND HE COULD WITHDRAW IT WITHIN FIVE HOURS, SO HE CHOSE TO CALL THE POLICE.

Hong Kong police said many victims had suffered losses in the stock market and were attracted by the platform’s false returns of up to 40 percent. The platform also makes false claims that it guarantees profits and is risk-free, making investors gullible and deceived.

SFC: There are no material deficiencies in the regulation

In September this year, there was a fraud case of a virtual asset trading platform, known as the JPEX case, in Hong Kong. According to the latest news from the Hong Kong police, more than 2,600 victims of the case have been reported, involving more than 1.6 billion yuan, and a total of 66 people have been arrested.

The JPEX incident has caused a sensation in Hong Kong, causing public opinion to question Hong Kong’s virtual asset policy, and many industry players are worried that Hong Kong’s support for the development of the Web3 ecosystem will be shaken.

RECENTLY, THE HOUNAX CASE HAS SPARKED A SIMILAR DISCUSSION. In response, the Chief Executive Officer of the Hong Kong Securities and Futures Commission, Julia Leung, said that the fraud of virtual asset trading platforms does not mean that there are major deficiencies in supervision.

She said that before receiving the complaint, the SFC had not noticed HOUNAX’s activities in Hong Kong. HOUNAX’s fraud modus operandi is consistent with the usual tactics of ramp-and-dump in traditional financial market products, so the presence of fraud does not mean that there are significant regulatory deficiencies, and the SFC has continued to monitor the promotion of unlicensed trading platforms on social media.

As for whether to shorten the grace period for the licensing of virtual asset trading platforms, Leung said that even if the grace period is over, fraud cases will continue to occur, so there will be no change in the grace period for the time being.

Hong Kong Legislative Council member Ng Kit-chuang suggested that Hong Kong should strengthen regulatory measures, saying that regulators should work closely with the police to actively monitor and block suspicious platforms that citizens come into contact with, and publish the names of relevant platforms. He also suggested taking the initiative to launch an official mobile app to detect suspicious websites and software, as a result of the Mainland’s practice, so as to remind the public to avoid being deceived.

Be wary of investing

According to the official website of the Hong Kong Securities and Futures Commission, in addition to HOUNAX, there are currently 8 other platforms on 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 the Hong Kong Digital Research Institute, and details of the list show that the platform claims to be licensed by the Securities and Futures Commission, but this is not the case.

The Hong Kong Securities and Futures Commission has warned investors to be cautious and avoid trading with these platforms.

Industry analysts say that for investors to protect their interests, some precautions must be taken. First of all, investors should carefully research and understand the platform they intend to invest in, including its background, registration status, and regulatory permissions, etc., and avoid blindly following the opinions of so-called investment experts. Second, investors should be wary of 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 for authorities to detect all scams, so everyone should do their own research on platforms and products before investing.