Crypto scam losses total $ 124 million, says young businessman

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The warnings for cryptocurrency-related scams are, from left to right, Ip Cheuk-yu, Fan Chun-yip, Clara Chiu, and Lee Siu-chui. ERIN CHAN Previous Next

Erin chan

A 30-year-old businessman trying to profit from soaring cryptocurrency prices has been scammed HK $ 124 million, police say.

Authorities will file an amended Anti-Money Laundering and Terrorist Financing Ordinance within a year of the Legislative Council that will extend oversight of the Securities and Futures Commission’s Intermediaries Division to platforms selling cryptocurrencies such as the bitcoin.

A total of HK $ 214 million from 496 crypto scams were lost in the first six months of the year, compared with 208 scams and a loss of HK $ 37 million recorded in the first half of last year, a indicated the police. One case involved the businessman who police said encountered three fraudsters posing as investment consultants through a friend. He was prompted to invest in Filecoin and promised huge profits.

Between February and April, he deposited HK $ 124 million into the fraudsters’ bank accounts in two installments. In June, he attempted to cash in after Filecoin’s value fell from US $ 168 (HK $ 1,310) to US $ 73, but the scammers disappeared.

The teens were also victims of crypto scams, police said. A 14-year-old high school student lost around HK $ 500,000, which he borrowed from his family. He told police that in March he saw a post on social media about the old banknote acquisitions and then contacted the “buyers”.

They said they would pay HK $ 190,000 for his banknotes, but first he would have to help them pay a series of fees.

The student was instructed to purchase Google Play gift cards worth HK $ 8,000 and pay “customs clearance fees” in 12 installments. He was then asked to buy bitcoin for HK $ 497,500 and transfer it to their e-wallets. They disappeared soon after.

Superintendent Fan Chun-yip, of the police force’s cybersecurity division, said fraudsters have favored crypto transactions – over bank deposits – in recent years.

Another scam involves scammers selling non-traditional cryptocurrencies with discounts for traditional cryptocurrencies, Fan said.

Fake investment programs involving non-traditional cryptocurrencies launched via an initial coin offering have also emerged.

“Fraudsters persuade victims to trade traditional cryptocurrencies for these non-traditional cryptocurrencies, which cannot be indexed to a market price and whose values ​​can drop significantly over time,” he said. declared. “Victims cannot cash these non-traditional cryptocurrencies. Some don’t even exist.”

Clara Chiu Ka-lai, director of licensing and head of the commission’s fintech unit, said that under the Securities and Futures Ordinance, the regulator will only oversee platforms selling at least one type of securities tokens.

Chiu said the amended ordinance, allowing the commission’s oversight to extend beyond these platforms, would take a year or two to be put in place.

Cybersecurity Division Chief Inspector Ip Cheuk-yu said most of the 441 adults surveyed earlier this year had a cursory understanding of cryptocurrencies.

Lee Siu-chui, head of the Youth Crime Prevention Center at the Hong Kong Federation of Youth Groups, said a young worker who lost up to HK $ 100,000 in cryptocurrency turned to his association for help.

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