Crypto Fraud Ring in Hong Kong Scams Millions, 27 Arrested

Authorities in Hong Kong have uncovered a fraud group that used "deepfake" technology to misuse $43 million worth of cryptocurrencies, resulting in 27 arrests.

The operation had been based in an industrial building in Hung Hom since October last year.

Fraudsters have used artificial intelligence to create attractive female images during video calls, building trust with victims across Asia, including Singapore and Taiwan. Senior Inspector Fang Chi-king noted that the group recruited digital media graduates to develop fake trading platforms.

After establishing credibility, the perpetrators present crypto investment opportunities by presenting fake trading records to convince victims to invest large sums. Many only realised they had been scammed when they were unable to withdraw their funds.

During the October 9 raid, police seized more than 100 mobile phones, luxury watches and more than HK$200,000 in cash. Charges of conspiracy to defraud and weapons possession were filed against the suspects.

The uncovering of the fraud comes at a time when Hong Kong’s cryptocurrency environment is facing increased regulatory scrutiny. Hong Kong’s Securities and Futures Commission (SFC) is reviewing a number of crypto platforms for potential licensing and plans to issue batch licenses to ensure compliance.