7th October 2023 – (Hong Kong) The recent epidemic of investment scams in Hong Kong lays bare a tendency for naive greed among many citizens. The tendency for scams to proliferate is illustrated by the ongoing JPEX virtual asset trading debacle. Over HK$1.5 billion has reportedly vanished in this scheme, affecting more than 2,500 individuals. Numerous arrests have been made, including the CEO of an OTC crypto store. Luxury cars like Porsches and a multi-million dollar Lamborghini have been seized as suspected illicit gains. Yet the ease with which this scam found willing victims shows much work remains in boosting scepticism and critical thinking when encountering ‘amazing’ investment opportunities. All the warning signs were present, but the power of greed prevailed. Lured by fantasies of overnight wealth, all logic is suspended in pursuit of impossible returns. This willingness to believe claims by shady characters reveals deep financial illiteracy. Urgently needed is greater public education on realistic investing lest the scam plague continues unabated.

HK$8.5m Lamborghini own by a suspect linked to JPEX scam seized by police in Tuen Mun yesterday.

Sadly, some appear incapable of comprehending a simple truth – if an investment opportunity seems too good to be true, it invariably is. Yet dubious schemes promising ridiculous profits within weeks proliferate, finding endless gullible takers. Images of flashy cars are sufficient bait to hook those intoxicated by visions of imminent affluence.

The scams ride on human psychology’s innate weakness for desiring great wealth fast. But this is no excuse for such childish credulity. Some modest critical reflection would unveil the sheer impossibility of promised payouts. Do folks genuinely think investment returns can be conjured from thin air? Alas, common sense vanishes when dollar signs dance before the eyes.

Cautionary tales abound both locally and worldwide of scammers like Bernie Madoff with his brazen Ponzi fraud. And related court cases regularly feature in the Hong Kong media. But warnings go unheeded in the relentless quest for a money tree. Even highly educated professionals get duped by smooth-talking scam artists.

Partly this stems from magical thinking that success in finance is ordained rather than earned through prudence and patience. People seek short cuts and trick themselves into believing overnight miracles will eventuate. They embrace baseless hype from online influencers over tried-and-true financial wisdom.

The lack of basic financial knowledge compounds matters. Few comprehend how legitimate investment works nor possess the skill to scrutinise dubious schemes’ formulaic traits. Risk and return are treated as empty buzzwords while scammers spout financial mumbo-jumbo that goes unquestioned.

Some even misguidedly view investing as akin to gambling, relying on fate rather than fundamentals. They speculate wildly without reasonable justification, ignoring that market odds are firmly stacked against casual punters. True investing relies on careful analysis and diversification, not hopes of hitting the jackpot.

Fixating on isolated success stories also breeds unrealistic optimism. People see images of wealth but not the immense toil and discipline required for honest achievement. Quick riches come through luck. Lasting wealth accrues through temperance and prudence.

There are no shortcuts in finance, only scams. Those unwilling to embrace this fact will forever be scam victims. Change begins with individuals taking responsibility for their greed and gullibility. A degree of humility and skepticism is essential when encountering unbelievable investment opportunities.

If against all reason some remain determined to try dubious schemes, they should only risk money they can afford to lose. Lessons bought through folly may teach caution just as well as advice from wiser heads. But consequences become needless life-destroying tragedy when folks foolishly bet savings meant for other purposes.

However, the best safeguard is proper financial education – currently sorely lacking in Hong Kong. Greater awareness of how scams work is vital so people can spot red flags immediately. Real-world investment skills must also be taught so people grasp viable ways to sensibly grow wealth.

Schools should prioritise financial literacy covering debt management, budgeting, saving, investing basics and scam avoidance. Broad-based ignorance makes the community vulnerable. Inoculating future generations is crucial for closing loopholes that scammers exploit.

The government also bears responsibility for vigorous consumer education and warnings. Likewise, mainstream media must go beyond superficial reporting to in-depth financial explainers and scam analyses. Combined efforts can help the public understand how to invest wisely and avoid traps.

Of course authorities should continue strict enforcement action against scammers. But over-reliance on this is insufficient and reactionary. Cultivating public financial wisdom on a mass scale is the lasting solution. This begins by treating citizens as empowered responsible adults rather than wide-eyed children in money matters.

With foresight and honesty, the investing environment in Hong Kong can mature beyond one rife with naivete and magical thinking. But progress requires individuals taking ownership of their knowledge gaps and gullibility before scammers rob them blind again. The fault is not with the stars but with ourselves.

Promotional video used on Cryptopard’s Instagram account featuring Chan Siu-lung.