Raymond Yuen, a Hong Kong-based Internet personality and stock market commentator, is facing accusations of duping web users into investing in fraudulent a crypto mining scheme.
According to the Hong Kong media outlet, The Standard, the Democratic Party confirmed receiving at least 12 complaints against Yuen. Moreover, according to the Democratic Party, the losses received from the complainants range between HK$10,000 and HK$600,000. Furthermore, the total investment in the Ponzi scheme is estimated to be at about HK$6.9 million.
Reportedly, Yuen lured internet users to invest in crypto mining services that he was promoting, promising the investors juicy profits. He proceeded to entice investors into binding themselves by signing contracts which promised a 10-month payback offer.
Used Celebrity Status
Popularly referred to as “The Young Wizard of Investment,” Yuen’s rise to stardom in the investment arena is credited to the early 2000s. At the time, he proved to be a very savvy player in the stock market. Additionally, he has been hosting radio shows on Digital Broadcasting Corporation and Commercial Radio focusing on investment.
Due to his status, he managed to lure investors into participating in the alleged a Ponzi scheme. He enticed them to sign a cryptocurrency contract that offered a 10-month payback offer. He even endorsed investing in cryptocurrency contracts through Secret Technology Limited. However, most of the investors, who are now complainants, ended up only receiving a 1 per cent return on their investment.
Lack of Transparency
According to complainants, Yuen did not give full disclosure of the contract terms, and they didn’t carefully read them. Additionally, Yuen failed to fully disclose the investment risks inherent in the investment. Furthermore, Yuen made false assertions that the company had affiliations with the cryptocurrency founder, implying a change of “algorithm to outperform its competitors.”
Sham Shui Po district councillor Ramon Yuen Hoi-man criticised Raymond Yuen for inflating investment returns of the scheme. Moreover, the complainants lamented that the contract signed denied them the right to class action lawsuit.
Though it is unclear whether some of the investors used loans to invest, the Standard noted one investor who borrowed. Reportedly, Chan borrowed HK$200,000 and invested in the mining service for a minimal return of HK$7 per day.
Celebrity Endorsed Scams
The trend of celebrities using their status to dupe investors is not new. Recently, American rapper T.I. was embroiled in a legal case in which he is facing legal suits over a cryptocurrency token that he was involved in. The token, FLiK, initially attracted close to $1.3m in investment largely due to T.I’s involvement. However, the Rapper is now facing legal suits with 25 investors claiming that FLiK was a pump and dump scheme.
Initially, boxer Floyd Mayweather and renowned producer DJ Khaled have involved a lawsuit claiming that they in the now infamous Centra Tech cryptocurrency scam. Notably, the duo endorsed the virtual currency on social media.