Lawmaker urges swift asset freeze after $95.8m traced in Fun Coffee scam

Lawmaker Johnny Ng Kit-chong has urged authorities to swiftly begin asset-freezing procedures linked to the Fun Coffee cryptocurrency investment scam after an investigation identified up to 12.28 million Tether, or USDT, worth about HK$95.78 million, in traceable funds that could potentially be frozen.

The probe, conducted by a third-party organization commissioned by the Hong Kong Anti-Fraud Alliance, estimated that total blockchain transactions linked to the alleged fraud reached 221 million USDT, or about HK$1.73 billion.

Victims have submitted the detailed findings to police in the hope of facilitating asset recovery efforts.

Investigators began by tracing 18,725 USDT allegedly lost by one victim on the TRON blockchain and mapped a complex six-layer transfer network.

The analysis identified a token-sweeping address that received 130 transactions totaling about 654,000 USDT. The funds were subsequently transferred to a core distribution address that received around 14.11 million USDT.

About 70 percent of those funds were then routed through a hot wallet identified as “Bitpie,” which investigators believe was used to make the transaction trail more difficult to trace.

The report also found that 64.34 million USDT was transferred through Bitpie into a dedicated rebate account suspected of serving as a commission pool for downstream agents.

Other funds were routed to five major cryptocurrency exchanges, apparently for conversion into fiat currency.

Investigators identified 29 exchange deposit addresses involved in 808 transactions, with Binance receiving the largest share. The findings could allow law enforcement agencies to seek account-holder identity records from the exchanges as part of their investigation.

One HTX address holding about 250,000 USDT was also flagged as “sanctioned,” suggesting that the funds may already be subject to monitoring in connection with an existing enforcement case. Investigators said the address could therefore become a priority target for freezing or seizure if the relevant legal procedures are initiated.

Ng urged authorities to accelerate asset-freezing efforts to prevent the remaining funds from being moved elsewhere, noting that the actual volume of transactions could exceed the amount identified in the investigation.

He also called for closer coordination between the Securities and Futures Commission and police in issuing warnings and taking action to freeze suspicious assets, alongside stronger cross-border law enforcement cooperation.

Ng further proposed tighter regulation of search engine advertisements, including stricter anti-money laundering requirements, real-name verification for advertising accounts and clearer labeling to prevent fraudulent investment platforms from reaching potential victims.

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