Teen among four suspects arrested by Hong Kong police in HK$11 million crypto scam

The Hong Kong police announced the arrest of four members of a crypto fraud syndicate, including a 14-year-old. According to the HK police, the suspects swindled nearly HK$11M (~$1.4M) from unsuspecting victims from October 14, 2023, to date.

Yuen-shan, chief inspector of the Commercial Crime Bureau, confirmed that 14 crypto scammers related to the case had been arrested so far. She disclosed that the four Chinese men were between the ages of 14 and 39. The chief inspector clarified that the four were arrested for using 5,000 fake banknotes (in denominations of HK$1,000) and suspicion of conspiracy to defraud.

HK police explain syndicate’s structure

According to the Yuen-shan, the criminal syndicate operated in clear labor divisions. She disclosed that two of the suspects acted as masterminds and were in charge of sourcing the counterfeit banknotes. They were also responsible for setting up premises to open a fake online crypto exchange and seek out online victims, explained Yuen-shan. 

The chief inspector affirmed that the other two suspects moved the counterfeit money from a Mong Kok mini-storage facility. She added that they also posed as staff members of the crypto exchange to attend to walk-in clients. Notably, Yuen-shan stated that the masterminds impersonated a famous crypto investor to swindle people with enticing offers. 

Yuen-shan unveiled the scheme, detailed how victims were invited into the premises, and showed stacks of counterfeit notes to win their trust. According to the chief inspector, the victims were convinced by the suspects to settle the transactions online despite not being allowed to touch the money.

“The suspects did not allow victims to untie the stack of HK$1,000 banknotes because only the top and the bottom ones were authentic.”

-Lo Yuen-shan   

Yuen-shan asserted that the tactics were similar for all four, in which 12 victims lost nearly HK$11 million. The suspects refused to pay and moved the assets out of the account once the crypto was transferred.

The Hong Kong police calls for vigilance

It's reassuring to see Hong Kong law enforcement actively targeting financial fraud, especially in the crypto space. Transparency matters!

— mihainut (@mihainut) July 28, 2024

Senior inspector Wai-kwong disclosed that HK youths were likely to be recruited into criminal activities during summer holidays when they were free. Kwong called for vigilance and asked Hong Kong residents to always check banknotes to ensure authenticity. 

According to the senior inspector, Hong Kong law imposed a maximum penalty of 14 years in prison for the production and circulation of fake money. A crypto enthusiast, Defi Lion, expressed excitement in knowing that the Hong Kong police were taking serious action against financial fraud in the crypto space.

Another crypto fan, Altcoin Ace Hub, also believed it was ‘dope’ that the Hong Kong police were stepping up to protect victims against crypto scams.