Hong Kong authorities have raised concerns about a rise in fake banknotes entering circulation through cryptocurrency scams.
In a recent local report, the Hong Kong police confiscated 3,396 counterfeit notes between January and April 2024. These fake bills had a total face value of HK$2.55 million, equivalent to around $326,130.
A large portion of these counterfeit banknotes were linked to just three cryptocurrency scams and fraudulent activities.
One case involved a scammer creating a fake cryptocurrency exchange in Tsim Sha Tsui. An unsuspecting woman fell victim to this scheme when she exchanged HK$1 million in Tether’s USDT stablecoin. The scammer made off with the cryptocurrency, leaving the woman with fake HK$1,000 notes. Another individual lost HK$1 million in a similar fashion, with the scammer absconding with the USDT funds.
The Hong Kong police also seized 1,693 “training notes” and 347 low-quality counterfeit bills associated with these scams. Training notes are used to train bank staff and closely resemble genuine currency.
Law enforcement authorities have arrested three people in connection with these fraudulent activities, and the seized funds have been recovered.
Earlier this year, the police seized 3,000 hell banknotes, a safe, and a note-counting machine from a cryptocurrency exchange shop in Tsim Sha Tsui. Hell banknotes are typically used in traditional Chinese rituals as offerings to ancestors or deities, bearing a striking resemblance to real currency.
Authorities have urged the public to report any counterfeit notes to the police to avoid being implicated in passing fake currency.
In a separate development, the Hong Kong police have observed a significant increase in cryptocurrency-related crimes, with reported cases rising from 2,336 to 3,415 in a year. Victims have lost a staggering $553 million to these scams.
The scams typically involve convincing victims to transfer funds to the scammers’ wallets or exploiting the hype surrounding cryptocurrencies. The lack of understanding about cryptocurrencies among some individuals makes them susceptible to fraud.
The surge in crypto-related crimes has prompted heightened scrutiny, leading Hong Kong’s securities regulator to establish a licensing system for crypto service providers. Additionally, Chinese authorities have pledged to collaborate with the United Arab Emirates (UAE) to combat cybercrime.
In contrast to the United States, Hong Kong is reportedly considering staking in spot Ethereum ETFs as part of its cryptocurrency investment strategy.