A large increase in the amount of financial loss caused by bitcoin scams was observed in Hong Kong in the year 2022. According to local police reports, victims of cryptocurrency scams lost a total of HK$1.7 billion in 2018, marking a 106% increase over the previous year. Furthermore, the number of cryptocurrency fraud incidents increased by 67 percent since 2021, reaching 2,336 cases. According to the Hong Kong police website CyberDefender, these scams were responsible for more than half of the HK$3.2 billion stolen from the city’s citizens as a result of technology crimes.

The increasing use of cryptocurrencies has made it increasingly difficult for authorities to trace the origin of money obtained through illegal activities. Fraudsters can hide their names, transactions, and final destination thanks to the anonymity provided by cryptocurrency transactions. Because of this, keeping track of the money criminals leave behind has become increasingly difficult for law enforcement.

The Hong Kong Police Cyber ​​Security and Technological Crime Bureau has provided information on the profile of a typical scammer operating in the cryptocurrency industry. These scammers will claim to have extensive knowledge in the financial markets, particularly when it comes to crypto assets, precious metals, or foreign exchange goods. They often use lures to lure unsuspecting victims into downloading fake investment programs that display fictitious trades and profits.

In order to differentiate its approach to cryptocurrency regulation from China’s total cryptocurrency ban, due to be implemented in 2021, the Hong Kong government has been actively involved in the development of bitcoin infrastructure. The Hong Kong Securities and Futures Commission issued a request for public comment in February on the updated proposed licensing framework for cryptocurrency exchanges, which is scheduled to take effect from June 2023. Despite this, it is It is very important to be extremely careful. while investing in cryptocurrency, as scammers continue to develop new methods to abuse market weaknesses.