Hong Kong Police Bust Fraudsters Responsible for $50 Million Crypto Fraud Scheme
Crypto Fraudsters Exploit Deepfake Technology and Romance Scams Across Asia Amid Global Surge in Scams Targeting Digital Assets
Hong Kong police, in a major crackdown on fraud, arrested 27 individuals involved in a sophisticated cryptocurrency scam that defrauded victims across Asia of over $46.3 million.
The scam used deepfake technology and fake romantic relationships to lure victims from countries like mainland China, Taiwan, India, Singapore, and Malaysia into investing in fraudulent cryptocurrency schemes.
How the Scam Operated
The fraudsters ran the operation from an industrial center in Hung Hom, treating their illicit activities like a corporation. They recruited university graduates, particularly those with digital media expertise, to act as tech specialists. Police say the group’s 29-year-old alleged leader has known ties to the Sun Yee On triad, a local triad gang.
The Hong Kong Police have stated that the attack was organized with performance rankings for employees, training manuals containing detailed scripts, and AI-generated imagery. The fraudsters also operated across borders while leveraging the digital and anonymous nature of cryptocurrencies. Once they established trust, they persuaded victims to invest in bogus cryptocurrency platforms.
Police Busts Scam Center, Seizes Assets
The investigation began after authorities received intelligence in August 2024. After two months of meticulous tracking, they identified the scam’s headquarters and the individuals involved. Subsequently, the police launched an operation, codenamed “Secret Word,” on October 9 and raided the scam center, successfully dismantling their operation.
Among the confiscated items were high-end watches, including a red Richard Mille worth HK$2 million ($257,400) and a gold Rolex valued at HK$300,000 ($38,600).
Ultimately, according to Hong Kong Police reports, those arrested will face charges of conspiracy to defraud, with some also facing additional charges related to the possession of offensive weapons.
The Hong Kong police force condemned the operation, calling it a severe disruption to victims’ lives.
Nonetheless, this year has seen a massive surge in hacking and scam activities with July recording over $1.5 billion in stolen cryptocurrency assets. This trend reflects the increasing sophistication of cybercriminals, who continue to adapt their methods to exploit vulnerabilities in the financial system.
