In a significant operation, Hong Kong law enforcement has dismantled a cryptocurrency investment scam operating from an office in the Hung Hom area, with estimated losses of HK$360 million ($46.35 million). The arrest of 27 individuals, aged between 21 and 34, was made on suspicion of conspiracy to defraud and possession of firearms, as announced during a police conference on October 14. Notably, several of those arrested were graduates in digital media from local universities, while others are believed to have connections to local organized crime groups.
Globally, reported losses from cryptocurrency investment scams reached $3.96 billion in 2023, marking a 53% increase from $2.57 billion in 2022, according to the Internet Crime Complaint Center. The actual figure is likely to be significantly higher, with scam and fraud cases accounting for 43.9% of all reported crime in Hong Kong during the first half of this year. While such scam operations have been identified in other parts of Southeast Asia, India, Dubai, and more recently Sri Lanka, this discovery is unusual for Hong Kong.
"The discovery of a large, well-organized, and physically based cross-border fraud center in Hong Kong is rare," stated Yiu Wing-kin, superintendent of the New Territories South Crime Headquarters. However, this is not an isolated incident of scam operations in the city. In late August, police arrested six Malaysians and five local residents involved in a HK$61 million ($7.8 million) phone scam, which had four operational centers in Hong Kong.
Among the items seized during the operation were training manuals detailing the scam's methodology, which involved contacting victims on social media and establishing a romantic relationship before persuading them to invest in a fake cryptocurrency platform. The group collaborated with overseas scam operations and computer experts to design the fake investment platforms.