Hong Kong’s Securities and Futures Commission (SFC) has issued a public warning about Proxinex, a crypto exchange suspected of engaging in fraudulent activities. On 29 July 2024, the SFC added Proxinex to its “Suspicious Virtual Asset Trading Platforms Alert List.”
In a press release, the watchdog said the alert was prompted by multiple investor reports of difficulties withdrawing virtual assets from Proxinex, with some investors being told their accounts did not exist.
Proxinex Investors Lured Agents Through Dating Apps
An SFC investigation revealed that Proxinex might have employed an agent to lure investors through dating apps. The said agent used fabricated documents purportedly from local financial regulators and institutions to bolster its profile.
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Although the Proxinex website is currently inaccessible, the SFC cautioned the public to remain vigilant, as similar fraudulent websites may continue to emerge.
“Online investment scams may involve any type of assets and are perpetrated through multiple channels, and investors can suffer substantial losses,” SFC said. “Therefore, investors should stay vigilant and beware of fraud when making investment decisions.”
Proxinex Scam Alert in Hong Kong ?? ?
The Hong Kong Securities and Futures Commission (SFC) has issued a warning regarding Proxinex, a platform suspected of being involved in virtual asset-related fraud. Investors are urged to exercise caution and avoid dealings with Proxinex…
— Global Ledger (@GlobalLedger) July 29, 2024
Concerning fraudulent activity, the SFC also restricted access to BitCuped and the Hong Kong Digital Research Institute’s websites. This caution follows large losses in prior incidents, like the Hounax fraud, in which investors lost over HK$120 million (US$15.4 million).
In related news, Hong Kong police arrested four individuals, including a 14-year-old, in connection with a syndicate. The accused allegedly used counterfeit banknotes to defraud victims out of HK$11 million (US$1.4 million) in cryptocurrency.
These arrests bring the total number of individuals apprehended for similar crimes to 14 since October last year, Chief Inspector Lo Yuen-shan of the Commercial Crime Bureau told the South China Morning Post.
The four suspects, aged between 14 and 39, were detained on charges of conspiracy to defraud and possession and use of 5,000 fake banknotes.
The police detailed that the syndicate operated with clear task divisions: two masterminds sourced fake banknotes and set up bogus cryptocurrency exchange shops, while the other two retrieved the notes from a mini-storage facility in Mong Kok and assisted in creating a facade of legitimacy.
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Hong Kong Sees A Series Of Exchange Closures
Hong Kong has actively pursued its vision of becoming a prominent crypto hub. The authorities have licensed two crypto exchanges that facilitate limited retail trading.
However, Hong Kong has witnessed a series of crypto exchange closures lately. 13 companies have withdrawn or returned their license applications.
On 28 March 2024, HKVAEX, suspected to be affiliated with Binance, withdrew its license application. Subsequently, IBTCEX, QuanXLab, and Huobi HK followed suit, followed by Gate. HK, OKX HK and Bybit were next in line to withdraw applications.
These withdrawals have left only 15 virtual asset trading platforms remaining on the application list.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
