Hong Kong Investors Lost $50 Million to Crypto Scams in 2022 (Report)

Cryptocurrency fraud has reportedly been one of the most common cyber crimes in Hong Kong during the first half of 2022, with 25% involving digital assets.

The number of such fraudulent schemes can be explained by the growing interest in cryptocurrencies shown by many Hong Kong residents. A recent research classified the state as the most crypto-savvy nation worldwide.

105% more crypto fraud than in H1 2021

According to a South China Morning Post coverage, there have been 10,613 cyber attacks in Hong Kong between the beginning of January and the end of June this year. 798 were cryptocurrency-related scams – a 105% increase over the same period in 2021.

Criminals siphoned off HK$387.9 million (around $50 million) from Hong Kong-based digital asset firms and individuals – a significant increase compared to the $21 million stolen in the first half of 2021.

One such victim was the 30-year-old woman named Fan, who runs a currency exchange shop in the region. A few months ago, she received a message on WhatsApp from an anonymous person who introduced himself as the head of a digital asset platform. The criminal lured her into investing approximately $280,000 in Tether (USDT).

“The first four transactions to be exchanged [cryptocurrency] Tether worked fine. The victim received HK$2.7 million, which included payment to her for the exchange service she provided the scammer. At that point, the fraudster gained the victim’s trust,” police agents noted.

Soon after, the perpetrator advised Fan to transfer the accumulated profits to a dubious cryptocurrency wallet. Needless to say, she lost access to her assets while the scammer stopped communicating with her.

Hong Kong police further determined that fraud related to digital assets was one of the top three scams in the country for the first part of 2022. The other two were job offer fraud and fraudulent online shopping activity.

Hong Kong is climbing the crypto ladder

The rapid rise of cryptocurrency scams in Hong Kong may be fueled by the growing appetite for digital assets, as residents have recently demonstrated. A survey conducted last month found the Special Administrative Region of China to be the most crypto-savvy country globally.

The first place was the result of a combination of a number of factors, including the friendly attitude of the government towards the industry, the number of cryptocurrency ATMs and the interest in the sector per capita.

The world’s leading economy – the USA – came second, while Europe’s financial hub – Switzerland – followed in third place.