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Hong Kong police have initiated a thorough investigation into the activities of the crypto trading platform <a href="https://coingape.com/hong-kong-maintains-crypto-exchange-grace-period/?utm_source=sidebartabnews">Hounax</a>. This action follows reports from over 130 individuals who claim to have been defrauded, with losses amounting to a staggering $15.4 million. <a rel="nofollow" href="https://www.scmp.com/news/hong-kong/law-and-crime/article/3242822/hong-kong-police-vow-make-arrests-after-hounax-virtual-asset-trading-platform-allegedly-tricks-131">The South China Morning Post </a>has highlighted the urgency of the situation, noting the commitment of local authorities to make imminent arrests. 
Hounax, initially posing as a promising virtual asset trading platform, caught the attention of the <a href="https://coingape.com/top-crypto-exchange-seeks-multiple-licenses-in-hong-kong/">Securities and Futures Commission</a> (SFC) earlier this month. The platform, believed to be based in Singapore, was marked as suspicious after it falsely claimed associations with a reputable financial institution and a venture capital firm. 
<h2 id="strong-victims-lured-by-fake-hounax-promises-strong">Victims Lured by Fake Hounax Promises</h2> 
The fraudulent scheme, as described by Chan Wai-kei, superintendent of the Hong Kong Police’s Commercial Crime Bureau, involved perpetrators masquerading as investment experts. They lured potential investors with the promise of high returns through virtual currency investments. However, when these investors attempted to withdraw their funds, they found themselves unable to do so. 
The victim profile is broad, ranging in age from 19 to 78, with the most substantial single loss, $1.54 million, reported by a 69-year-old retired woman. The police have so far received 88 reports from 131 individuals, painting a grim picture of the scam’s extensive impact. 
The method employed by the alleged scammers was insidious yet effective. They reached out to potential victims through social media and WhatsApp, inviting them into group chats filled with purported “hot tips.” The victims were then encouraged to download the Hounax app via a hyperlink and transfer funds to a third-party account to enhance their investment ostensibly. 
<h2 id="strong-victims-face-losses-in-hounax-fraud-strong">Victims Face Losses in Hounax Fraud</h2> 
Initially, the platform displayed convincing returns, but these were soon revealed to be fabricated. When the funds were transferred, they were siphoned off to unknown destinations. Attempts to withdraw the funds were met with demands for a hefty “verification” fee, purportedly to comply with international anti-money laundering regulations. Even after paying these fees, the victims were unable to recover their funds, as the alleged investment managers disappeared, and victims were removed from the group chats. 
The Hong Kong police have underscored the severity of the situation, with Chief Inspector Or Wing-yan revealing that arrests are imminent. In a proactive measure, they have also requested telecom companies and social media platforms to take down the website and associated accounts to prevent further victimization. 
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Hong Kong Police Investigate Hounax in Massive Crypto Scandal

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