Hong Kong SFC Suspends Accounts Of Individuals Related To A Scam

Last year, going by records witnessed one of the highest amounts of scams in the crypto sector, and at the rate things are going, it looks like this year wouldn’t be a difference. Even though regulators have sprung up to roll out several regulations, these malicious actors have always found other ways to perpetrate their evil deeds.

In turn, regulators are doing well to quash such dealings, as seen in the recent case involving the Hong Kong Securities and Futures Commission and two brokers. In the recent news, the watchdog in the country has ordered the two brokers to suspend accounts belonging to individuals that have been suspected of having carried out frauds.

Individuals were involved in a pump and dump scam

According to the Hong Kong regulator, the individuals were involved in manipulating the market for their gains. The statement obtained from the regulator said that it had ordered both brokers, Enlighten Securities and Futu Securities International, to put a temporary suspension on the accounts of the malicious actors until when investigations are over. Furthermore, the SFC mentioned that the accounts, which were said to belong to three individuals, were said to have been involved in a pump and dump scam.

The SFC mentioned that the individuals in question used shares belonging to two firms between March and October 2020 to carry out their malicious deeds. With the restrictions in place, all the parties involved will not be able to process transactions and withdraw assets from their respective accounts on the brokers.

Also, the SFC has warned the brokers that the individuals should not use third-party access to take funds from the suspended accounts. Third-party access is when the individuals in question give a signatory to the accounts access to their accounts to withdraw all or part of the suspended funds in the accounts.

The SFC warns investors to be careful with the investments that they make

The SFC also released a memo that mentioned that should the clients try to access the blocked accounts, the brokers should not hesitate to let them know about it. Even though the watchdog has not released the individuals’ details in question, it was quick to note that the brokers in question were not under its watchful eyes. The SFC has also warned people to be careful with the way they venture into business because these perpetrators are now using online methods to draw in their clients instead of the usual in-person contact.

“Traders should be careful with who they listen to in terms of business and investments as these malicious actors now used social media such as Facebook, Instagram, and others to deceive their customers into investing in scam businesses,” the watchdog said.

The SFC also warned that traders should not be afraid to contact the authorities if they notice that they have been drawn into fake investments as the earlier they notify them, the earlier they will catch those involved. In their statement, the SFC mentioned that almost 20% of the cases in their office are related to scams like this, as it is currently on the rise across the region.

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