Hong Kong Police Uncover $360M Global Crypto Fraud Ring

In the heart of Hung Hom neighborhood in Hong Kong, police uncovered a massive cross-border fraud center responsible for defrauding victims worldwide of over HK$360 million (approximately $45.93 million USD).

The Hong Kong Police Force (HKPF) dismantled the operation, arresting 27 individuals aged between 21 and 34 years, for conspiracy to defraud and possession of offensive weapons. Described as unusually large and meticulously organized, the operation involved local university graduates, overseas fraudsters, and IT experts. They allegedly collaborated to create a fake cryptocurrency investment platform.

The scam employed a sophisticated “romance scam” strategy, using artificial intelligence-based “deepfake” technology to initiate virtual romantic relationships with victims online. The perpetrators produced training manuals in both Chinese and English. They even instructed recruits on how to engage potential investors through fake profiles, video chats, and convincing stories.

Sophisticated Scammers Target Victims Across Asia

The scam artists reportedly created a convincing digital facade with a website, social media accounts, and phone numbers, all designed to lure unsuspecting victims into investment scams. The criminals equipped their operation with sophisticated computer hardware and software, enabling them to create and manipulate virtual currency transactions.

The HKPF investigation revealed that the perpetrators were primarily male, with numerous victim profiles from mainland China, Taiwan, India, and Singapore. Scammers reportedly targeted victims through social media platforms and online ads claiming to be women seeking companionship or romantic relationships. Once established, the scam artists would convince victims to invest in cryptocurrencies through a fake platform, promising high returns with little risk.

The HKPF’s investigation found that the perpetrators were well-versed in IT and social engineering tactics. This is what made it difficult for law enforcement agencies to detect their activities. For this reason, the police is working closely with international authorities to dismantle this fraud center and bring the culprits to justice.

Hong Kong’s Thriving OTC Crypto Market Drives Institutional Activity

Hong Kong has been known for its industry-friendly regulations in relation to cryptocurrencies.

A Chainalysis report reveals that the OTC market has a major role to play in this regard. “Much of this is driven by Hong Kong’s highly active OTC market. OTCs, or “over-the-counter” trade desks, typically facilitate large transfers for institutional investors and high net worth individuals, which are conducted privately so as to not affect asset prices or broadcast traders’ activity.

Hong Kong’s skew toward OTC activity manifests in the city’s breakdown of transaction volume by transaction size, which we show on the chart below alongside that of its regional neighbors and the overall global average,” said the report.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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