Lawmakers warn over Fun Coffee crypto scam

Hong Kong police and a city lawmaker said on August 5 that losses linked to the Fun Coffee platform had climbed as investigators pursued what authorities described as a cross-border suspected fraud tied to a Vietnam-linked coffee investment venture. Police said they had received 225 complaints since July and that reported losses had reached HK$104 million. Lawmaker Johnny Ng said the number of affected investors could exceed 1,000. Hong Kong’s securities regulator had already placed “Fun Coffee GCM Projects” on its suspicious-investment list on July 13. ### How did Fun Coffee present the investment to people in Hong Kong? Hong Kong police said the scheme was marketed as a coffee-related investment project connected to Vietnam and sold through in-person events, social gatherings and promotional activities. Victims were told to download a Fun Coffee mobile app, register, convert funds into cryptocurrency and transfer the assets to designated wallet addresses before investing, according to police accounts published by local media. (msn.com) The Securities and Futures Commission said “Fun Coffee GCM Projects” was added to its suspicious-investment products list on July 13. The regulator said the operator and marketing agents were identified as Fun Coffee in Hong Kong and Vietnam, and warned that the listing covered an unverified investment offering targeting the public. ### What returns were investors told they could make? (news.hket.com) Macau’s Judiciary Police said investors were offered projects with annual returns of as much as 222%. Hong Kong police said one premium plan required an investment equivalent to about HK$230,000 in cryptocurrency and promised a profit equivalent to about HK$1 million after 570 days, implying a return of more than four times principal. (sfc.hk) Hong Kong police said some investors increased their stakes after seeing friends receive apparent payouts at an early stage. Investigators said the app later stopped functioning and customer service stopped responding, prompting complaints after investors were unable to withdraw principal or returns. (news.rthk.hk) ### Who has been arrested so far? Hong Kong and Macau police said on August 4 and 5 that eight people had been arrested in a joint operation. Hong Kong police arrested six local suspects — one man and five women aged 51 to 64 — on suspicion of conspiracy to defraud, while Macau police arrested two women in the city. Macau police said the two women there were linked to a Fun Coffee shop that had operated for about eight months and had promoted the investment through free coffee tastings. (news.hket.com) Hong Kong police said the six people arrested in the city included alleged core members involved in promotion, investor recruitment and company administration. ### Why is a lawmaker saying the known complaints may understate the scale? (chinadailyhk.com) Johnny Ng, a Hong Kong lawmaker, said on August 5 that more than 1,000 people might have been affected. Ng’s estimate was based on information from investors and on team-based recruitment inside the scheme, according to reporting on his comments. One investor told the South China Morning Post that losses across her team totaled HK$14 million. (macaupostdaily.com) Police figures released earlier this week were lower. On August 4, Hong Kong police said they had received 225 reports involving about HK$94 million in losses as of August 3. By August 5, the reported loss figure had risen to HK$104 million while the complaint count remained at 225, according to the later police update cited in local reporting. (msn.com) ### What has happened in Macau? Macau’s Judiciary Police said nine complainants there had reported losses totaling about 3.6 million patacas, and investigators believed at least 40 people had invested through the local shop. The complainants were described as two men and seven women, mostly middle-aged or older, with individual losses ranging from more than 50,000 patacas to more than 1.5 million patacas. (news.hket.com) The Macau case helped trigger the joint operation with Hong Kong. Macau police said one suspect was intercepted while preparing to leave via the Hong Kong-Zhuhai-Macau Bridge, and the two arrested there were transferred to prosecutors. ### What comes next in the case? Hong Kong police said forensic examination of seized phones, bank cards, cash and documents was continuing after searches of business premises and homes in Kowloon Bay and Tsim Sha Tsui. (news.rthk.hk) Authorities said they were trying to identify additional victims and clarify the roles of the people arrested. The Securities and Futures Commission still lists Fun Coffee GCM Projects on its suspicious-investment products page, and Hong Kong and Macau police have both urged anyone who invested through the platform to contact investigators. (sfc.hk) (news.hket.com)