Hong Kong investors lost 50m from crypto scams

Cryptocurrency scams have reportedly been one of the most common cyber offenses in Hong Kong during the first half of 2022, and 25% involved digital assets.

Hong Kong investors lost 50m from crypto scams

The concerning number of such fraudulent schemes could be explained by the growing interest in cryptocurrencies displayed by many Hong Kong residents. A recent research classified the state as the most crypto-ready nation across the globe.

105% More Crypto Scams Than in H1 2021

According to a South China Morning Post coverage, there have been 10,613 cyber attacks in Hong Kong between the beginning of January and the end of June this year. 798 were cryptocurrency-related fraudulent schemes – a 105% increase considering the same period in 2021.

Wrongdoers drained HK $387.9 million (around $50 million) from Hong Kong-based digital asset firms and individuals – a significant surge compared to the $21 million stolen in H1, 2021.

One such victim was the 30-year-old woman named Fan, who manages a currency exchange store in the region. A few months ago, she received a message on WhatsApp from an anonymous person who presented himself as the head of a digital asset platform. The criminal lured her into investing approximately $280,000 in Tether (USDT).

“The first four transactions to exchange [cryptocurrency] Tether went smoothly. The victim received HK$2.7 million, which included payment to her for the exchange service she provided to the scammer. By that point, the scammer gained the victim’s trust,” law enforcement agents noted.

Shortly after, though, the wrongdoer advised Fan to transfer the accumulated profits to a dubious cryptocurrency wallet. Needless to say, she lost access to her assets while the scammer ceased communication with her.

The Hong Kong police further determined that digital asset-related frauds were one of the top three cheats in the country for the first part of 2022. The other two were job offer scams and fraudulent online shopping activity.

Hong Kong Climbs up the Crypto Ladder

The rapid increase of cryptocurrency scams in Hong Kong could be fueled by the surging appetite for digital assets, which residents have recently shown. A survey conducted last month revealed that the special administrative region of China is the most crypto-ready country globally.

The first spot was a result of a combination of numerous factors, including the friendly government stance toward the industry, the number of cryptocurrency ATMs, and the interest in the sector per capita.

The world’s leading economy – the USA – ranked second, while Europe’s financial hub – Switzerland – followed in the third position.