Losses from cryptocurrency scams double to HK$1.7 billion in Hong Kong last year, with 67 per cent spike in cases
- According to police, 2,336 cryptocurrency-related scams reported in Hong Kong last year
- One woman vice-president of fashion company duped out of digital tokens worth HK$6 million trying to buy kitten
Financial losses from cryptocurrency-related scams doubled to more than HK$1.7 billion (US$216.6 million) in Hong Kong last year, as the number of victims tricked into funnelling digital assets to online swindlers jumped 67 per cent
Latest police figures showed the scams accounted for more than half of the HK$3.2 billion conned out of city residents, as well as some victims living abroad, in nearly 23,000 reports of technology crimes last year.
According to the force, 2,336 cryptocurrency-related scams were reported in Hong Kong last year – a 67 per cent rise from 1,397 cases logged in 2021. The cases involved about HK$1.7 billion in funds, a 106 per cent increase from the year before.
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Sources said police had witnessed an increase in the use of cryptocurrency as a medium for internet scams as fraudsters were able to conceal their identities in transactions and hide the origin, flow and final destination of their proceeds of crime.
One insider admitted the anonymity of cryptocurrency trading made their money-tracing task “more difficult”.
He said he also believed the greater prevalence of cryptocurrency in scams was one of the factors behind a 43 per cent drop in the amount of money stolen through fraud and intercepted by police in 2022, reaching the lowest level since 2019.
The force set up its anti-deception coordination centre in July 2017 to track down illegal funds and identify new tactics used by swindlers.
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Anti-fraud officers intercepted more than HK$1.3 billion in scammed money and blocked more than 500 cases of deception involving wire transfers to fraudsters last year, the force said.
They intercepted HK$2.3 billion in defrauded money in 2021, down from HK$3.07 billion in 2020 and HK$3.03 billion in 2019.
The force also issued a fraud alert last month after tricksters deployed a new type of scam to cheat animal lovers. One woman victim, a vice-president of a fashion company, was duped out of digital tokens worth HK$6 million.
She fell victim to the scam after she responded to an online post about the sale of a kitten by a scammer who posed as a pet lover in Thailand.
She was later told the kitten had died during delivery but she would be entitled to insurance compensation. She was asked to pay an administration fee upfront in cryptocurrency. The victim transferred HK$6 million worth of bitcoin to an e-wallet across 40 transactions before she realised she had been duped.
A senior officer said the strategy was new, but warned that swindlers often changed tactics.
A 63-year-old investment manager lost more than HK$12 million he inherited from his late father after he fell victim to an internet love scam last month.
The swindler, who claimed to be a woman cryptocurrency expert, developed a relationship with the man over the internet and coaxed him into setting up an account on a bogus website to invest in digital money.
Police warned that “cryptocurrency and non-fungible tokens [NFTs] are highly speculative virtual assets. Caution must be heeded when conducting relevant transactions and investment”.
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“Members of the public should never disclose their password or private key to an unreliable person or social media platform,” it said.
The force said anyone in doubt about online activities should call its anti-scam helpline at 18222.
Hong Kong police last year handled 22,797 reports of technology crime, a 41 per cent rise from 2021. The cases involved financial losses amounting to HK$3.21 billion, up 6.3 per cent from the year before.
Among last year’s cases were 1,884 online investment frauds involving HK$926 million.
“To find targets online, scammers make as many new friends as possible and upload their photos of everyday life frequently to show off their wealth to gain credibility,” the force’s cybersecurity and technology crime bureau said.
“They then claim to be highly experienced in investing in crypto assets, precious metals or forex and then lure victims into installing fraudulent investment applications showing fake transactions and returns.”
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Police said employment fraud was also a prominent form of online crime in the city.
Figures showed 2,884 people lost HK$459 million last year after they fell for dubious job offers – a marked increase from the 1,063 cases logged in 2021 involving HK$85 million.
Another source attributed the surge to a sharp increase in a form of online employment fraud known as click farming or “boosting sales”, where swindlers send fake job offers through SMS or instant messaging, offering people cash rewards for e-shopping.
Jobseekers were usually told their mission was to boost sales and the popularity of a retail outlet by using their own money to shop online, with swindlers promising to pay them back with a commission.
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The force said some victims received a full refund and commissions in the first round of purchases to lull them into a false sense of security. They carried out more transactions and ended up losing money.
Victims realised they had been conned when they failed to receive the sum they put down, or the promised commission, and were unable to contact the “employer”.
Police also singled out online shopping frauds, which increased by 42 per cent last year, and romance scams.
The amount of money people lost through romance scams rose last year by 16 per cent to HK$697 million, but the number of cases dipped 7 per cent.
A police spokesman said the force would continue to work to improve public awareness of cybersecurity and technology crime trends through online platforms, social media platforms, seminars and media conferences.
The force introduced the “Scameter” search engine last September to combat online and phone fraud. The service is accessible through the police CyberDefender website.
