Shocking rise in crypto scams: Hong Kong reports losses of $216.6m

Some countries worldwide have seen increased cryptocurrency scams despite the bear market in 2022. Losses from crypto scams in Hong Kong amounted to 1.7 billion Hong Kong dollars ($216.6 million) last year — a 106% increase from the previous year, according to local police. The number of reported crypto-related scams in Hong Kong in 2022 was 2,336 cases — a 67% increase from 1,397 cases recorded in 2021.

These scams accounted for more than 50% of the 3.2 billion HK$ ($ million) stolen from city residents in technology-related crimes last year, according to data from Hong Kong police CyberDefender website. This is a significant increase from the amount of money stolen in the previous four years, which amounted to around 3 billion HK$ each year. Altogether, there were nearly 23,000 reported cases of technology-related crimes in 2022.

According to South China Morning Post sources, police have observed increased use of cryptocurrency in online scams. Fraudsters can remain anonymous and obfuscate transaction flows and final destinations, making it difficult for authorities to trace criminal funds.

The Hong Kong police force’s cybersecurity and technology crime bureau has identified typical crypto-related scammers who masquerade as experienced investors in crypto assets, precious metals, or foreign exchange products. Victims are deceived into installing fraudulent investment applications that show false transactions and returns.

The Hong Kong government’s report on cryptocurrency comes when the city takes a distinct approach to crypto regulation compared to China, which imposed a blanket ban on digital assets in 2021. In February, the Securities and Futures Commission released its plans for a new licensing regime for crypto exchanges, set to take effect from June 2023, and invited public feedback on the regulations.