Wong Chin Kit, a Hong Kong-based crypto entrepreneur, has reportedly been arrested by Police authorities alongside an unnamed 20-year old man.
The men are accused of masterminding a scheme that asked investors to buy a cryptocurrency known as “Filecoin,” under the claim that the money will be spent on purchasing mining machines.
Wong and his accomplice led investors to believe that Filecoin was already tradable on exchanges and would return profits after three-months while this was not the case.
Several of the cities residents fell for the scheme and purportedly invested huge sums of money into “filecoin.”
As per the SCMP report, the sixteen men and two women who filed a report with the Police claim they had invested as much as HK$2.6 million ($331,000) with one of the victims losing HK$1.1 million ($140,000).
Another victim also filed a lawsuit against Wong, requesting a refund of the HK$125,000 ($16,000) which he claimed to pay for five machines last year.
Meanwhile, the Chief Police officer presiding over the case, Ho Yui-kuen, claimed that there may still be several unidentified victims given that Wong and his accomplice promoted the scheme for a long time through seminars and social media.
Police authorities have arrested Wong and his accomplice while also seizing documents, computers and cash found in their possession. Additionally, the authorities froze assets amounting up to HK$5 million ($637,000).
The case involving Wong is only one in a spate of crypto crime reports by Stmarket.co in recent times. In February, a New York District court ordered Antony Liu and Mengxian Zhang, the principal men behind the MCash token to pay $6 million to a Chinese investor whom they lured into buying the fake cryptocurrency.
Israeli crypto entrepreneur, Moshe Hogeg, is also facing a $4 million fraud lawsuit, albeit for a different reason.
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