In a recent development in Hong Kong’s cryptocurrency landscape, scammers have managed to lure 145 unsuspecting victims into investing a staggering $18.9 million into the unlicensed crypto exchange known as Hounax.
These fraudulent individuals posed as investment experts, promising investors an annual return of up to 40%, all while guaranteeing “no risk” in their enticing advertisements.
However, once users deposited their hard-earned funds into Hounax, they found themselves unable to make withdrawals.
The Securities & Futures Exchange (SFC) of Hong Kong raised concerns about Hounax’s suspicious activities and listed it on its billboard of questionable crypto exchanges on November 1.
However, due to Hounax’s unlicensed status at the time of the incident, the regulator’s enforcement actions did not apply.
This incident marks the second cryptocurrency scandal to hit Hong Kong in recent months.
In September, another unlicensed exchange called JPEX collapsed amidst allegations of running a Ponzi scheme.
READ MORE: Demand for Bitcoin Futures Surges
This led to 66 arrests and an estimated loss of $205 million for investors.
Despite these troubling events, Hong Kong regulators are displaying a resolute commitment to establishing the city as a prominent hub for Web3 technologies.
SFC CEO Julia Leung stated that they have no intentions of modifying the grace period and other measures aimed at regulating the cryptocurrency sector, even if the grace period ends in June 2024 under current regulations.
In a positive turn of events for the crypto industry in Hong Kong, financial institutions Interactive Brokers and Victory Securities recently announced that they have obtained crypto licenses.
Interactive Brokers has partnered with the licensed crypto exchange OSL to offer immediate Bitcoin and Ethereum trading services to its clients in Hong Kong.
Furthermore, on November 29, Darryl Chan, deputy chief executive of the Hong Kong Monetary Authority, unveiled an ambitious multinational initiative known as “mBridge.”
This protocol aims to create a cross-chain bridge for China’s digital yuan central bank digital currency, with the goal of reducing transaction fees and improving cross-border transaction speeds.
The first pilot tests for mBridge will commence in mainland China and Hong Kong, marking a significant step towards enhancing the digital yuan’s utility on a global scale.
Discover the Crypto Intelligence Blockchain Council
