Hong Kong investors lost $50 million to crypto scams in 2022 (Report)

Cryptocurrency scams have reportedly been one of the most common cybercrimes in Hong Kong during the first half of 2022, with 25% involving digital assets.

The worrying number of such fraudulent schemes could be explained by the growing interest in cryptocurrencies shown by many Hong Kong residents. Recent research ranked the state as the most crypto-ready nation in the entire world.

105% more crypto scams than in the first half of 2021

According to coverage by the South China Morning Post, there have been 10,613 cyberattacks in Hong Kong between the beginning of January and the end of June this year. 798 were cryptocurrency-related fraudulent schemes, an increase of 105% considering the same period in 2021.

The miscreants siphoned off 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 currency exchange shop in the region. A few months ago she received a message on WhatsApp from an anonymous person who presented himself as the head of a digital asset platform. The criminal lured her into investing approximately $280,000 in Tether (USDT).

“The first four transactions to exchange [cryptocurrency] Tether worked flawlessly. The victim received 2.7 million Hong Kong dollars, which included payment for the exchange service she provided to the scammer. At that point, the scammer gained the victim’s trust,” law enforcement officials said.

However, soon after, the malefactor advised Fan to transfer the accumulated earnings 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 determined that digital asset-related fraud was one of the top three scams in the country during 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, which residents have shown recently. A survey conducted last month revealed that China’s special administrative region is the most crypto-ready country globally.

The top spot was the result of a combination of numerous factors, including the government’s friendly stance towards the industry, the number of cryptocurrency ATMs, and interest in the sector per capita.

The world’s leading economy, the US, ranked second, while Europe’s financial hub, Switzerland, remained in third place.

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