Investors say they were promised profits after three months of mining Filecoin.
According to an article in the South China Morning Post (SCMP), a number of investors claim they were tricked into investing in “crypto machines” and lost a total of 3 million Hong Kong dollars (HK$) (about $382,924 USD) to Hong Kong-based cryptocurrency promoter Wong Ching-kit.
The SCMP reports that the Democratic Party within the Legislative Council of Hong Kong says it has received over 20 complaints since October 2018 regarding Wong’s alleged scheme. Wong allegedly encouraged investors to purchase mining hardware for a token called Filecoin, promising the clients profits within three months of their investment.
Filecoin advertised that it would be built on proof of replication, incentivizing miners to fulfill data storage requests from other users on the Filecoin market to earn more of the token. ETHNews covered Filecoin’s $186 million ICO in August 2018. The Filecoin sale ended in September 2018 after raising a total of $205.8 million.
This is where the investors’ problems began. They claim that Wong promised profits even though Filecoin is not a tradeable token at present. An August 2018 blog post from Filecoin indicates that the launch of the network was estimated to take place in quarter two or three of 2019. The website’s FAQ page also states that, during the ICO, Filecoin encountered fraudulent parties claiming to sell Filecoin and warned that individuals should “[stay] away from any exchange or entity who claims to be buying, selling, or trading Filecoin.”
The four investors in the article claim to have lost between HK$20,000 (about $2,552) and HK$1 million (about $127,641). An unnamed police spokesperson is also cited as stating that nine more individuals had lodged complaints with authorities, claiming a total loss of HK$940,000 (about $119,982). Each investor is demanding a full refund.
Wong has yet to be officially charged. The SCMP reports that Ramon Yuen Hoi-man, deputy spokesperson of the Democratic Party’s financial panel and Hong Kong authorities, will conduct a probe into Wong’s dealings with the investors and investigate a possible money laundering charge.
Wong, who co-runs the Facebook group Epoch.Cryptocurrency, was arrested in December 2018 for throwing HK$500 bills from the roof of a building in Hong Kong. He apparently livestreamed his arrest on Facebook.
Nicholas Ruggieri studied English with an emphasis in creative writing at the University of Nevada, Reno. When he’s not quoting Vines at anyone who’s willing to listen, you’ll find him listening to too many podcasts, reading too many books, and crocheting too many sweaters for his dogs, RT and Peterman.
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