In the year 2022, Hong Kong saw a significant rise in the number of financial losses brought on by bitcoin scams. This led to an overall loss of a significant amount of money. Reports from the local police indicate that victims of cryptocurrency scams lost a total of HK$1.7 billion in 2018, showing a 106% increase from the previous year’s total loss amount of HK$800 million. A total of 2,336 instances of fraudulent activity involving cryptocurrencies were reported in 2022, representing a 67 percent rise from the previous year. According to the CyberDefender website run by the Hong Kong police department, these cons were responsible for more than half of the HK$3.2 billion in financial losses that were incurred by residents of the city as a direct result of technological offenses.
Because of the rise in cryptocurrency usage, it is now far more difficult for authorities to determine where money that was earned through unlawful conduct originated from. Due to the secrecy that cryptographic money transactions provide, dishonest individuals are able to disguise their identities, as well as their transactions and their ultimate destination. Because of this, it is now significantly more challenging for law enforcement to follow the money trail left by criminals.
The Cybersecurity and Technology Crime Bureau of the Hong Kong Police Department has offered some insights on the profile of a typical fraudster operating in the cryptocurrency market. These insights were provided by the Cybersecurity and Technology Crime Bureau. These scam artists will pretend to have great understanding of the financial markets, particularly when it comes to crypto assets, precious metals, or foreign exchange commodities. But, they are just trying to get their victims’ money. They frequently utilize bait to persuade victims who aren’t paying attention to download fake investment programs that display fictional transactions and profits. These apps are used to defraud victims.
The government of Hong Kong has taken an active role in the development of bitcoin infrastructure in order to differentiate its approach to cryptocurrency regulation from China’s outright ban on cryptocurrencies, which is scheduled to be enacted in 2021. In February, the Securities and Futures Commission of Hong Kong issued a request for public comment on the updated proposed licensing framework for cryptocurrency exchanges. This framework is slated to go into effect beginning in June 2023, and the request for public comment was issued in conjunction with this announcement. In spite of this, it is still of the utmost importance to exercise great caution when investing in cryptocurrencies, as con artists continue to invent new ways to exploit the vulnerabilities of the market.
