- Hong Kong police dismantled a crypto fraud operation, recovering NT$12 million and arresting 53 suspects.
- A criminal gang set up fake crypto exchange shops, deceiving victims with false “preferential exchange rates.”
- Police warn the public to use reputable crypto exchanges after a rise in fake customer service and trading scams.
The Western District Police in Hong Kong have recently dismantled a large-scale crypto fraud operation and recovered scams of NT$12 million. Sticking Wind,” a month-long operation, led to the identification of 41 types of fraud, including fraudulent cryptocurrency exchanges, and the apprehension of 53 suspects.
Among the identified frauds was a gang that had set up fake cryptocurrency trading outlets in Wan Chai and Tsim Sha Tsui. The identified group deceived its victims by offering them ‘preferential exchange rates’ in relation to cryptocurrencies.
Targeting Crypto Enthusiasts
The group leased real stores, spending more than NT100,000 for rent to give the impression of the bona fide business. The fraudsters would collect the money, and then after customers arrived to pay with the digital currency or money, they would vanish.
In one case, three victims were cheated out of NT$5 million by the group at a shop in Wan Chai. A similar scheme was conducted in March 2024 in Tsim Sha Tsui when six people lost NT$7 million to the scammers. In total, the two scams resulted in the loss of NT$12 million of funds.
38 males and 15 females aged 21 to 71 years old were arrested including the leaders of the criminal syndicate and ‘puppet account holders’. The persons arrested were charged with various offenses including money laundering and conspiracy to defraud; obtaining property by deception; and using forged documents.
Most of those apprehended were from the unemployed category, while others worked as chefs, hair stylists and beauticians. The criminal group also used fake ID cards to open accounts in virtual banks to make the whole fraud network more complex.
Fake Customer Service Scams Soar
Besides, cryptocurrency fraud, the police have indicated an increase in fake customer service scams. In the period between July and August, 80 cases were recorded, a figure higher than the combined total of the previous two-quarters. In these scams, the fraudsters impersonate customer service agents and make the victims send money to pay the fake fees or the unpaid bills.
The police have warned people conducting business with cryptocurrencies to be very careful and to only deal with well-established exchanges. The police have seized NT$11 million of proceeds from the crime related to the frauds and are still pursuing other members of the fraud gang.
