Hong Kong authorities have arrested 25 individuals involved in a cryptocurrency scam and money laundering ring. The operation, conducted by the Wong Tai Sin District Crime Department from September 19 to 26, was codenamed “Lian Dou.” According to reports, the group defrauded victims of over 7 million yuan (approximately $1 million) through 39 different scams. The group consisted of 18 men and seven women, aged between 19 and 65, most of them unemployed, waiters, or construction workers.
The suspects, ranging from the mastermind to core members and puppet account holders, were arrested on charges of “obtaining property by deception” and “money laundering.” The Hong Kong police note that individuals have lost money to cryptocurrency scams at a rate of 7% of all fraud in the Special Administrative Region (SAR).
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Seizure of Devices and Cryptocurrency Wallets
During the arrest, the police recovered more than 20 electronic devices and two Bitcoin cold wallets belonging to the group. The probes showed that the group has operated since May 2023 and created a network of puppet accounts for accessing banking and cryptocurrency exchange accounts. The core members were well coordinated and had a clear line of work responsibility. They defrauded their targets, transferred the stolen funds to the control accounts, and almost immediately used associated, linked crypto exchange accounts for person-to-person (PTP) transactions, summarizing the stolen money in cryptocurrency.
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Some arrested suspects are a mastermind, three major members, and twenty-one account holders. Their activities involved targeting unsuspecting victims and, in the process, disbarring their savings. Senior Inspector Mak Ning-Fung, who led the operation, highlighted that the group was well-organized and each member had a role.
Fake Crypto Shops on the Rise
A growing trend in Hong Kong involves scammers setting up fake cryptocurrency exchange shops. These shops lure unsuspecting investors with promises of high returns and attractive exchange rates. Once the funds are deposited, the victims are robbed, and the scammers disappear. In one recent case, a victim lost $125,000 in a similar scheme.
As cryptocurrency scams continue to rise, Hong Kong authorities are increasing efforts to combat these fraudulent operations. The recent arrests represent a significant step in cracking down on the growing issue of crypto-related fraud in the region. However, authorities warn that scammers continually adapt their methods, and vigilance remains crucial for investors.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.