Crypto-related crime in Hong Kong has exploded over the past three years, with the number of reported cases almost tripling to 3,415 by 2023, involving HK$4.4 billion ($564 million). Faced with this scourge, the Hong Kong authorities have decided to take action.
Soaring crypto-related crime in Hong Kong
Attracted by a favorable regulatory framework, more and more crypto companies choose to set up in Hong Kong. But behind this image of a progressive technology hub lurks a darker side, with scams and a multitude of dubious platforms ready to abuse investors’ trust.
In just 3 years, crypto-related cybercrime has literally exploded across the country. According to the data reported, the number of cases increases from 1397 to 3415 between 2021 and 2023 while the amounts involved have almost tripled, from HKD 824 million to HKD 4.398 billion, equivalent to $564 million.
The most high-profile case remains that of the exchange platform JPEX. Behind a legitimate façade, this site has succeeded in obtaining around $150 million from thousands of investors before abruptly suspending operations. So far, only 8 suspects have been arrested and 7.5 million in frozen assets A drop in the ocean of losses generated by this fraudulent system.
Reinforced regulatory response and surveillance
Faced with a surge in crypto scams, the Hong Kong authorities have decided to crack down hard. Securities and Futures Commission (SFC) actively tracks down dubious platforms with the help of local police. No fewer than a hundred suspicious sites are currently on their radar some of which have even been officially listed on a sort of “blacklist” for the general public.
The aim is clear: to stem the spread of these toxic schemes as quickly as possible, as they threaten to undermine investor confidence.
At the same time, the authorities are working on tightening the regulatory framework governing the crypto assets sector. A public consultation is underway to examine a draft law aimed at better controlling the licensing of exchange platforms and other crypto service providers. Discussions are also taking place on specific regulations governing stablecoins, with the aim of rapidly submitting a strengthened regulatory arsenal to the Legislative Council.
Despite these measures, the crypto cybercrime landscape remains in constant evolution. With the emergence of new technologies and new fraud tactics, it is imperative that the authorities remain vigilant in the face of these challenges. As for investors, the utmost caution is also called for in the face of increasingly elaborate and deceptive scams. So, DYOR (Do Your Own Research) – doing your own research, with a critical eye – remains essential!
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
