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Hong Kong police crackdown on cryptocurrency scam involving counterfeit currency
Hong Kong authorities have reported an increase in counterfeit banknotes put into circulation via cryptocurrency-related scams.
According to a local relationshipBetween January and April 2024, Hong Kong police seized 3,396 counterfeit banknotes. The counterfeits amounted to a total face value of HK$2.55 million, or approximately $326,130.
Specifically, just three cryptocurrency-related scams and frauds were responsible for a large portion of these fakes in circulation.
One such case saw a scammer create a fake cryptocurrency for an ATM in Tsim Sha Tsui. An unsuspecting woman fell victim to this scammer when she exchanged HK$1 million into Tether’s USDT stablecoin. The scammer got away with the cryptocurrency funds and the woman was left with fake HK$1,000 notes.
Another person was scammed out of HK$1 million using a similar tactic, with the scammer getting away with the man’s USDT.
According to the recent report, Hong Kong police seized 1,693 “training notes” and 347 low-quality counterfeit banknotes linked to these scams. Training notes are used to train banking staff and closely resemble real currency.
Police have arrested three people in connection with these scams. The funds were seized.
Earlier this year, the Hong Kong police also arrested 3,000 hellish banknotes, a safe and a banknote counting machine from a cryptocurrency exchange shop in the same region as Tsim Sha Tsui.
Hell notes are used in traditional Chinese rituals as offerings to ancestors or deities. These look a lot like real currency.
As of now, the authorities have asked citizens to hand over fake banknotes to the police, otherwise they risk committing “the crime of dealing in counterfeit banknotes”.
Recently the Hong Kong police also noticed a significant increase in crimes related to cryptocurrencies. Crimes involving cryptocurrencies increased from 2,336 to 3,415 in one year.
As a result, funds worth a whopping $553 million were lost.
The scams mainly consisted of two different tactics.
In the first scenario, scammers would try to convince victims to transfer funds to their wallets. This is typically seen in the case of pig slaughter scams.
Fraudsters are also using foreign cryptocurrency exchanges, authorities said, further complicating the tracking process.
The other scenario involved scammers relying on the hype around cryptocurrencies. With cryptocurrencies becoming a hot topic in finance, scammers often exploit the misunderstanding of their victims to defraud them.
This increase in cryptocurrency-related crimes in the region has spurred increased scrutiny. The Hong Kong Securities Regulatory Authority has established a licensing regime for crypto service providers.
On the other hand, the Chinese authorities do busy working with the United Arab Emirates (UAE) in an effort to combat cybercrime.