Key takeaways:
- In Hong Kong, losses from cryptocurrency-related scams increased to more than HK$1.7 billion ($220 million) last year.
- The cybersecurity and technology crime division of the Hong Kong police force has found common crypto-related scammers who pose as knowledgeable investors in crypto assets, precious metals, or foreign exchange products.
According to a South China Morning Post (SCMP) report published on Tuesday, Hong Kong police obtained 67% more scam complaints involving cryptocurrencies in 2022 as the city sought to regain its position as a crypto hotspot.
Paul Chan, the financial secretary for Hong Kong, says that in 2023, local regulators and the government will be eager to cooperate with fintech and cryptocurrency startups. Hong Kong has developed regulations to become a hub for cryptocurrencies.
As per the latest police statistics, nearly 23,000 reports of technology crimes last year resulted in more than half of the HK$3.2 billion scammed out of city residents and some victims who were overseas.
According to official figures from the Hong Kong police CyberDefender website, more than 50% of the 3.2 billion HK$ ($407 million) in technology crimes that were committed in the city were cryptocurrency scams. Online fraudsters made about 3 billion HK$ per year or a similar sum in the previous four years.
According to the force, anti-fraud officers stopped more than 500 instances of fraud involving wire transfers to fraudsters last year and stopped more than HK$1.3 billion in scammed money. In 2021, they recovered HK$2.3 billion in fraudulent funds, compared to HK$3.07 billion in 2020 and HK$3.03 billion in 2019.
The cybersecurity and technology crime division of the Hong Kong police force also shared some observations about a typical crypto-related con artist, describing such offenders as feigning to be extremely knowledgeable about investing in crypto assets, precious metals, or foreign exchange products. According to the authorities, these people frequently coerce their victims into installing phoney investment software that displays fictitious transactions and returns.
One insider acknowledged that the anonymity of cryptocurrency trading made their job of tracking down lost funds “more challenging.”
Crypto exchange Binance also worked closely with the Hong Kong government to develop a targeted warning and message for crime prevention.
The exchange teamed up with law enforcement officials to create a customised warning and crime-reduction message that included helpful advice, examples of the most common scams, and crucial information and contacts.
