Hong Kong police arrest six over Fun Coffee scheme that took in HK$94 million

Hong Kong police have arrested six people suspected of involvement in Fun Coffee GCM Projects, an investment scheme that allegedly left depositors down HK$94 million, or about $11.9 million. For PSPs and crypto payment providers, the details matter: the setup used USDT, mobile app onboarding, and on-platform “investment packages” to move funds.

1. Police said the six suspects are aged 51 to 64, including five women and one man. Authorities also received 225 complaints from people aged 32 to 83 who said they lost money through the scheme.
2. Fun Coffee presented itself as a company researching high-tech coffee equipment and gene-improvement technologies for coffee plants. Investors were told to put in cryptocurrency and were promised annual returns of 278%.
3. One example offered to users was a 570-day placement of 29,800 USDT, or about HK$230,000, with a promised profit of 129,093 USDT, or about HK$1 million. Organizers also ran investor seminars and similar events, encouraging participants to bring in friends and relatives in exchange for rewards.
4. The process was straightforward in the way these schemes usually are: investors were told to download a mobile app, register, and then transfer crypto to addresses provided by platform staff, who said the funds were needed to buy “investment packages.”
5. Fun Coffee entered the Hong Kong market at the end of last year and promoted itself with ads about sports and healthy living. In July, Hong Kong’s Securities and Futures Commission (SFC) added Fun Coffee to its list of suspicious investment projects, and Vietnamese authorities said the company could be a Ponzi scheme. The project has also been expanding its presence in mainland China, Korea and Singapore.

Hong Kong last year introduced criminal liability for promoting stablecoins without a regulator’s licence, with offenders facing a substantial fine and up to six months in prison. In December, the city’s authorities also proposed tighter oversight of custodial services and broker-dealers dealing in cryptoassets.