Some countries around the world are experiencing greater financial losses due to cryptocurrency fraud despite the huge bear market in 2022.
Losses from crypto fraud in Hong Kong totaled 1.7 billion Hong Kong dollars ($216.6 million) last year – a 106% increase from a year earlier – according to local police.
The number of crypto-related frauds reported in Hong Kong in 2022 equaled 2,336 cases, a 67% increase from the 1,397 cases recorded by the police in 2021, the South China Morning Post (SCMP) reported.
Hong Kong scams involving crypto account for more than 50% of the HK$3.2 billion ($407 million) stolen from city residents in tech crimes, according to official data from Hong Kong police’s CyberDefender website. In the past four years, online scammers earned the same amount or about 3 billion HK$ per year.
There will be almost 23,000 cases of crime related to technology in 2022.
According to SCMP sources, police are witnessing an increase in the use of cryptocurrency as a medium for online fraud, with fraudsters able to hide their identity, transaction flow and final destination. One insider reported that the use of crypto in online crime has made tracking criminal funds more complicated for enforcement.
The Hong Kong police’s cybersecurity and crime technology bureau also shared some observations about typical crypto-related scammers, describing the perpetrators as pretending to be very experienced in investing in crypto assets, precious metals or foreign exchange products. Such people often lure victims into installing fake investment apps that show fake transactions and returns, police said.
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The report comes amid the Hong Kong government increasingly involved in the development of cryptocurrency infrastructure, differentiating its approach to crypto regulation from China’s blanket crypto ban to be implemented in 2021. In February, the Hong Kong Securities and Futures Commission asked for public feedback on the newly proposed . The licensing regime for crypto exchanges will be in effect from June 2023.