Hong Kong police arrested three individuals in connection to a fraud syndicate that defrauded at least 10 residents out of HK$5.1 million through fake virtual investment talk tickets. The victims were deceived into bidding for fake tickets to a virtual investment talk show with the promise of reselling them for a profit. The syndicate invited targets to an investment seminar at a grade-A office in Kowloon Bay, where they were lured into a fraud scheme with promises of high returns and no risk. The scammers controlled a sham trading platform through which attendees bid on admission tickets for the investment talk show.
Authorities revealed that the scammers persuaded victims to deposit money into a fake trading platform, promising a monthly return of 7% interest. The syndicate, which started operations in November 2022, is facing charges of conspiracy to defraud, which carries a potential prison sentence of up to 14 years. Police seized five mobile phones and cash amounting to HK$15,000 and 30,000 yuan. Inspector Tam Ho-yin of the Sau Mau Ping district crime squad explained that victims were led to bid on tickets starting at 100 Tether coins, equivalent to HK$780, with the promise of selling them for a profit the next day. As the bidding prices increased, the fraudsters claimed they would eventually repurchase all tickets at an inflated price of 15,000 Tether coins.
The money reportedly won by victims during the bidding process actually belonged to other victims, leading to substantial losses when the scheme ended. Victims who made profits introduced family and friends to the scam, but the trading platform ceased operations when new targets could not be found, leaving remaining participants with significant losses. Inspector Tam added that when victims tried to withdraw money, scammers made excuses and refused. The police are urging other potential victims to come forward. Hong Kong has seen a significant increase in fraud cases in the cryptocurrency space, with reports rising by 42.6% last year and financial losses surging by 89%.
In response to the growing number of scams in Hong Kong’s cryptocurrency space, the Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Police Force have partnered to tackle the issue. The collaboration aims to monitor unlawful activities associated with virtual asset trading platforms (VATPs) within Hong Kong territory. The initiative was prompted in part by the scrutiny of the JPEX exchange, the largest fraud case in Hong Kong’s history. Accusations have emerged that JPEX was advertising its services without the necessary license from the SFC, resulting in losses of approximately $166 million affecting over 2,000 investors.
To protect individuals from falling victim to scams involving unlicensed crypto platforms, the SFC has released a list of licensed, unlicensed, and suspect VATPs, along with those on the verge of closure. The list also includes VATPs awaiting SFC approval. The joint efforts of the SFC and the police force aim to combat fraudulent activities in the cryptocurrency space and safeguard investors from falling prey to scams. The public is encouraged to be vigilant and report any suspicious activities to the authorities to prevent further financial losses and fraudulent schemes.
