Hong Kong Investors Lose $50M to Crypto Scams in 2022 (Report)

Cryptocurrency fraud was reportedly one of the most common cybercrimes in Hong Kong in the first half of 2022, and 25% involved digital assets.

The alarming number of such fraudulent schemes could be explained by the growing interest in cryptocurrencies displayed by many Hong Kong residents. A recent survey ranked the state as the most crypto-ready nation around the world.

105% more crypto scams than in 1H 2021

According to a South China Morning Post cover, there were 10,613 cyber attacks in Hong Kong from the beginning of January to the end of June this year. 798 were crypto-related fraud schemes – a 105% increase considering the same period in 2021.

Fraudsters withdrew HK$387.9 million (about $50 million) from Hong Kong-based digital asset companies and individuals – a significant increase compared to the $21 million stolen in the first half of 2021.

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

“The first four trades to exchange [cryptocurrency] Tether went smoothly. The victim received HK$2.7 million, which included payment to her for the exchange service she provided to the scammer. By that point, the scammer has gained the victim’s trust,” law enforcement noted.

Shortly afterwards, however, the wrongdoer 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 found that digital asset-related scams were one of the top three scams in the country for the first part of 2022. The other two were job offer scams and fraudulent online shopping activities.

Hong Kong climbs the crypto ladder

The rapid rise in cryptocurrency scams in Hong Kong could be fueled by the growing appetite for digital assets that residents have shown recently. A survey conducted last month revealed that China’s special administrative region is the most crypto-ready country in the world.

The top spot was the result of a combination of several factors, including a friendly government attitude toward the industry, the number of cryptocurrency ATMs, and per capita interest in the industry.

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