Bitrabo Editorial
A fraudulent scheme involving “hell banknotes” has recently rocked Hong Kong’s cryptocurrency industry, resulting in the arrest of three individuals from a crypto exchange shop in Tsim Sha Tsui. These individuals allegedly duped a customer into transferring HK$1 million (approximately $127,500) worth of Tether (USDT) in exchange for fake currency used in Chinese rituals.
Unveiling the Crypto Scam and Police Intervention
The scam came to light when a 35-year-old man reported to the Hong Kong Police Force (HKPF) that he did not receive genuine currency after trying to convert his cryptocurrency at the shop. Instead, he was provided with stacks of ‘hell banknotes’—paper money meant for ancestral offerings, not legal circulation. This discovery prompted immediate police action.
The HKPF’s technology crime division swiftly apprehended the three men, aged 31 to 34, involved in the fraudulent operation. Subsequent investigations led to the seizure of 3,000 hell banknotes, a safe, and a note-counting machine, underlining the deliberate nature of the scam. The suspects coerced the victim into transferring USDT to their wallet, only to hand over worthless paper before absconding.
The perpetrators of this deceitful act could face severe legal repercussions, including up to 14 years in prison for fraud under Hong Kong law. They may also be charged with acquiring property through deception, carrying a potential 10-year penalty.
Precautionary Measures and Broader Impact
In response to this incident and related scams, the HKPF has advised the public to solely engage with ‘licensed and authorized cryptocurrency exchanges.’ They stress the importance of verifying banknotes and staying vigilant regarding transactional currency authenticity.
This occurrence aligns with a broader trend of cryptocurrency-related scams in the region. In a recent case, Hong Kong authorities arrested three individuals involved in a HK$1.8 billion ($228 million) money-laundering scheme utilizing a crypto platform and bank accounts tied to shell companies.
These incidents shed light on the sophisticated tactics employed by criminals within the digital financial landscape.
Florence Yeung Yee-tak, commander of the Financial Investigation Division of the Customs Department, highlighted the challenges in investigating such crimes due to the ‘anonymity’ of cryptocurrencies and the absence of ‘jurisdictional boundaries.’
To combat illicit crypto activities effectively, Yeung Tak mentioned the department’s reliance on intelligence, capital flow analysis, and thorough financial investigations.
Featured image from Unsplash, Chart from TradingView