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Hong Kong Crypto Scams Net HK$1.7B; Binance Launches Fraud Campaign

Crypto scams have doubled in Hong Kong but Binance is tackling fraud its own way.

Image credit: Bermix Studio on Unsplash

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Losses from cryptocurrency-related scams in Hong Kong doubled to over HK$1.7 billion (US$220 million) last year.

According to police figures, a total of 2,336 cryptocurrency scams were reported, marking a 67% jump from 2021. The scams accounted for over half of the HK$3.2 billion conned out of city residents, signalling a 106% increase from the previous year.

Insiders pointed towards the anonymity of cryptocurrency as a reason for the increase in crimes, making money tracing "more difficult."

It is also believed that the increase in crypto scams reflects the 43% drop in money stolen through fraud and intercepted by the police in 2022, marking its lowest level since 2019.

Hong Kong police set up an anti-deception coordination centre in July 2017 to trace illegal funds. The force warned that “cryptocurrency and non-fungible tokens [NFTs] are highly speculative virtual assets. Caution must be heeded when conducting relevant transactions and investment”.

“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.

In one scam, fraudsters targeted animal lovers, stealing HK$6 million from one victim. The scammers posed as a pet lover in Thailand who was selling a kitten.

The victim, a vice-president of a fashion company, was told the kitten died during delivery but that she would be entitled to insurance compensation. She was told to pay the administration fee upfront in cryptocurrency, so transferred HK$6 million worth of bitcoin to an e-wallet across 40 transactions.

Another scam saw a 63-year-old investment manager losing over HK$12 million in a crypto love scam. The fraudster claimed to be a crypto expert and coerced him into setting up accounts on fake websites.

Read more: Singapore Among Most Targeted Countries for Crypto Fraud

“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.”

Last year, Hong Kong was the fifth most targeted country or region for crypto fraud. South Korea came third, Japan fourth, and Singapore ninth.

Binance campaigns against fraud

On Friday, Binance announced the launch of an anti-crypto fraud campaign. The campaign was piloted in Hong Kong with the Cyber Security and Technology Crime Bureau (CSTCB) for the Hong Kong police force.

"Hong Kong Police is placing emphasis on effective crime prevention. As a result, we have joined forces with various stakeholders, including Binance, to provide key crime prevention advice to interested users,” CSTCB said.

“The joint anti-fraud campaign complements our existing anti-crime and crime prevention initiatives around the world.”

Through the new campaign, users are issued withdrawal warnings that aim to prevent sending crypto to scammers.

Read more: "Be Creative And VPN": Binance Execs' Messages Show Plan to Dodge US Regulation

So far, the 4 week old project saw 20.4% of users reconsidering withdrawing or checking whether the transaction could be a scam.

Binance plans to roll out the project to other jurisdictions.

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