Hong Kong police recently arrested three individuals in connection to a fraud syndicate that defrauded at least 10 residents out of HK$5.1 million (US$653,900) 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 the fraud scheme with promises of high returns and no risk.
The scammers operated a sham trading platform controlled by the syndicate, where victims were persuaded to deposit money in exchange for a monthly return of 7% interest. The syndicate began operations in November 2022 and faces 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 (US$4,145) during the arrest.
Inspector Tam Ho-yin revealed that victims were misled into bidding for each ticket starting at 100 Tether coins, equivalent to HK$780, with the promise of selling them the next day for a profit. As the bidding price increased, the fraudsters claimed they would repurchase all tickets at an inflated price of 15,000 Tether coins. The victims’ money ultimately belonged to other victims, leading to substantial losses when the scheme collapsed due to a lack of new targets.
To combat the rise in fraud cases in Hong Kong, the Securities and Futures Commission (SFC) and the Police Force have joined forces to tackle issues related to virtual asset trading platforms (VATPs) within the territory. Last year, there was a 42.6 percent increase in fraud reports, totaling 39,824 cases compared to 27,923 in 2022, with financial losses reaching HK$9.1 billion in 2023. The collaboration aims to monitor unlawful activities associated with unlicensed crypto platforms to protect investors from falling victim to scams.
The partnership between the SFC and the Police Force was solidified during a meeting on September 28, with the primary goal of regulating and monitoring illicit activities within the cryptocurrency space. The initiative was prompted by ongoing scrutiny of the JPEX exchange, the largest fraud case in Hong Kong’s history, involving losses of approximately $166 million and affecting over 2,086 investors. To prevent further scams, the SFC has released a list of licensed and unlicensed VATPs for public awareness.
In response to the increasing number of scams in Hong Kong, the police have urged other potential victims to come forward with information. Victims were misled into bidding for fake virtual investment talk show tickets with the promise of high returns and no risk, leading to significant financial losses. The collaboration between the SFC and the Police Force aims to combat fraud in the cryptocurrency space and protect investors from falling victim to scams involving unlicensed platforms. The initiative was prompted by the JPEX exchange case, the largest fraud case in Hong Kong’s history, which resulted in substantial losses for investors.
