HK Crypto Promoter Allegedly Scams Investors with Bogus Filecoin Mining Hardware

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Several investors allege they have been hoodwinked into investing in “crypto machines” and subsequently lost a total of 3 million Hong Kong dollars or roughly $382,924 USD. In a January 7 report by the South China Morning Post, investors lost their money to Hong Kong-based crypto promoter Wong Ching-kit.

The publication indicates that the Legislative Council of Hong Kong’s Democratic Party states that it has been deluged with more than 20 complaints linked to Wong’s supposed scheme since October. The Hong Kong crypto promoter has purportedly urged investors to buy crypto mining hardware for a token known as Filecoin. Wong has also promised revenues within three months upon investing.

Meanwhile, Filecoin claimed that it would be created on proof-of-replication, rewarding crypto miners for completing data storage requests from other customers on the Filecoin market to be able to generate more earnings from the token. Filecoin’s initial coin offering (ICO) successfully raised $186 million last August. The sale closed in September after netting a total of $205.8 million.

After this, investors report that Wong promised them proceeds even though Filecoin is currently not a tradeable token. In a blog post in August, Filecoin has stated that the network’s launch is projected to happen in the second or third quarter of 2019. According to the website’s FAQ page, Filecoin said that it came across a number of fraudulent entities claiming they sell Filecoin during their ICO. Filecoin has cautioned would-be investors to “[stay] away from any exchange or entity who claims to be buying, selling, or trading Filecoin.”

Four investors allege they have lost about HK$20,000 to HK$1 million (roughly $2,552 to $127,641). A spokesperson for the police department has reported that nine more individuals have filed complaints before the authorities, declaring a total loss of HK$940,000 or around $119,982. Investors also want a full refund.

Still, no official complaint has been lodged against Wong yet. According to the SCMP, Democratic Party’s financial panel deputy spokesperson Ramon Yuen Hoi-man, together with Hong Kong officials, will be investigating Wong’s activities to determine a potential money laundering charge.

Also a co-operator of the Facebook group Epoch.Cryptocurrency, Wong was arrested in December for hurling HK$500 bills from the roof of a Hong Kong building, where he livestreamed his actual apprehension on Facebook.