Hong Kong Police Crack Down on $46 Million Cryptocurrency Scam

Hong Kong Police Expose $360 Million Crypto Fraud Ring

Hong Kong police have successfully dismantled a sophisticated cryptocurrency investment scam operating out of an office in the Hung Hom area, involving a staggering HK$360 million (approximately $46.35 million). In a police conference held on October 14, authorities announced the arrest of 27 individuals aged between 21 and 34 on charges of conspiracy to defraud and possession of weapons.

Links to Local Triad Groups

Among those arrested, several were graduates in digital media from local universities, while others are suspected of having ties to local triad groups. This suggests a well-organized operation that may have leveraged both educational backgrounds and connections to organized crime.

Rise in Cryptocurrency Fraud Globally

According to the Internet Crime Complaint Center, reported losses from cryptocurrency investment scams reached $3.96 billion globally in 2023, marking a 53% increase from $2.57 billion in 2022. Experts believe the actual figure is likely much higher. In Hong Kong alone, scams and fraud cases accounted for 43.9% of all reported crimes in the city during the first half of the year.

A Rare Discovery in Hong Kong

While scams of this nature have been documented in various regions of Southeast Asia, as well as in India, Dubai, and more recently, Sri Lanka, the discovery of such a large and organized fraud operation is considered rare in Hong Kong. Superintendent Yiu Wing-kin of the New Territories South Crime Headquarters stated, “It is rare to find a cross-border fraud center that is quite large, well-organized, has a careful division of labor, and operates physically in Hong Kong.”

Previous Scams Indicate Growing Problem

Despite its rarity, this is not the only scam operation to surface in Hong Kong. In late August, police arrested six Malaysians and five local residents involved in a HK$61 million (around $7.8 million) phone scam operation that had four operational centers within the city.

Modus Operandi of the Scammers

During the recent crackdown, authorities seized various items, including training manuals that detailed how the scams were conducted. The operation resembled a typical “pig butchering” scam, where victims were contacted through social media with the intention of forming romantic relationships. Once rapport was established, the scammers persuaded their victims to invest in a fraudulent cryptocurrency platform.

Collaboration with Overseas Scam Networks

Police revealed that this group had collaborated with overseas scam operations and computer experts to design convincing but fake cryptocurrency investment platforms. This further underscores the complexity and sophistication of the scheme, making it a significant concern for law enforcement agencies.

FAQ: Cryptocurrency Investment Scam in Hong Kong