The Hong Kong Police has detained four individuals in connection with a scheme involving counterfeit banknotes used to defraud cryptocurrency investors. Local media reported that the operation has led to financial losses totalling up to USD 1.4 million.

These arrests are part of broader law enforcement efforts to address an increase in cryptocurrency-related scams in the area.  On 28 July 2024, Chief Inspector Lo Yuen-shan from the Commercial Crime Bureau disclosed that the recent arrests have increased the number of individuals detained in relation to these scams to 14 since October of the previous year. The suspects, who range in age from 14 to 39, were apprehended on 26 July and are facing charges of conspiracy to defraud, as well as possession and use of 5,000 counterfeit banknotes. According to police reports, the syndicate operated in a structured manner, with each member assigned specific roles.

Two suspects have been identified as the principal operators who obtained the counterfeit notes from a storage facility in Mong Kok. These individuals also disguised a nearby location as a legitimate business. The scheme involved impersonating a prominent cryptocurrency investor to attract victims with offers to buy digital currencies at rates above the market value.

The scammers targeted potential victims both online and in person. Victims were lured to a fake store where they were shown stacks of counterfeit banknotes. Only the top and bottom notes were genuine, designed to deceive victims into believing that the entire stack was real.

The suspects prohibited victims from inspecting the notes themselves and insisted on completing transactions online. Impact and ongoing efforts After the cryptocurrency transfers were made, the scammers quickly moved the assets from the victims' accounts and refused to return the funds. Chief Inspector Lo indicated that these methods are increasingly common, with this group and others defrauding 12 victims out of USD 1.4 million since October 2023.

Additionally, a global search is underway for two prominent Hong Kong cryptocurrency influencers previously associated with the troubled JPEX exchange in Dubai. They are facing charges of theft, fraud, and money laundering, prompting intervention by the Interpol. .