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Investors in Hong Kong File Complaints over Alleged Bitcoin Mining Fraud

Investors in Hong Kong File Complaints over Alleged Bitcoin Mining Fraud
26 Jul
11:55

Five investors have filed complaints to authorities in Hong Kong over alleged fraud involving Bitcoin mining machines.


Failed Promises

An investment seminar is reported to have taken place last December. At the time, investors were informed that if they used the Antminer S9 Bitcoin mining machine, they would earn around HK$288 ($37) each day.

Selling for HK$30,000 ($3,800) each, investors were told they would need to buy at least two. In a report from the Asia Times, Phemey Poon, a financial analyst, and Hilton Yuen, the host of an online investment channel, said that investors would break even in four months.

It’s thought that around 50 people purchased the machines at the event. Notably, though, while agreements were signed by investors with a company called Fifth Elements Ltd., explanations as to the agreement details weren’t given.

According to one buyer, unlike the claimed HK$288 per day earning, she only made about HK$50 ($6.30) on her first day of mining. After that, her profits dropped to a few dollars. To date, she has made around HK$3,000 ($382).

Bitcoin mining

Claiming No Connections

The report adds that Poon said he was only a speaker at the event and had no affiliation with the Bitcoin mining company. Not only that, but he claims that after investing in 100 of the machines, he lost around HK$1 million ($127,463).

Yuen is reported to have been an agent acting as a promoter for the machines.

With the price of Bitcoin dropping following its bull run late last year and the number of Bitcoins available to investors decreasing, the buyers of the mining machines felt the promises made at the seminar had not been lived up to.

As a result, they filed complaints to police in Hong Kong, alleging fraud. A request for a police investigation is underway, and no arrests have been made yet.

Chinese Police Confiscate Bitcoin Mining Machines

Elsewhere, authorities are conducting their own investigations regarding the use of crypto mining machines.

In April, Chinese authorities took control of 600 Bitcoin mining machines following reports of irregular electricity use.

This was followed by a report in June that a man had been arrested for alleged fraud involving mining machines. According to a report, 50 investors were duped out of $15 million after the suspect claimed to have a reliable supply of machines.

However, with Bitcoin’s price rising again, it may be that there will be more cases of alleged investor fraud with suppliers attempting to make a quick buck off the back of others.

Do you think this is a case of fraud? Let us know in the comments below.


Images courtesy of Shutterstock.

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