The crypto trading platform Hounax has become the subject of an investigation into an alleged fraud involving 120 million HKD ($15.4 million at current rate). The South China Morning Post reports.
According to the edition, the Hong Kong Police became interested in the company after receiving complaints from 131 people. Superintendent Chan Wai-kei of the Commercial Crime Bureau told local media that people were invited to invest in digital assets through the platform, but could not withdraw their money.
Earlier, the Hong Kong Securities and Futures Commission (SFC) added Hounax to its list of crypto-related suspicious organisations.
“The company claims that it is a cryptocurrency trading platform that is in business cooperation with a financial institution and a venture capital firm, although in reality this is not the case,” the regulator’s site says.
In September, the SFC launched an investigation into another platform — JPEX. Amid a liquidity crisis, the company paused all operations in the JPEX Earn service.
Eight suspects linked to the alleged fraud were detained. Authorities froze their accounts totaling $1.9 million and seized assets worth $5.6 million.
The Hong Kong Monetary Authority warned unlicensed crypto firms against describing their services as banking. The regulator regards such advertising as misleading to customers.
Previously, local police carried out 458 arrests in 314 money-laundering cases totaling almost $60 million, a quarter of which involved digital assets.