Hong Kong police authorities have apprehended a group of four persons over their involvement in a crypto fraud to the tune of to HK$11 million, equivalent to $1.4 million (U.S.) The syndicate’s operational tactic involved using counterfeit banknotes to dupe their victims.

According to local media, the group includes a 14-year-old teenager, with the oldest aged 39 years. The syndicate had in their possession, about 5,000 fake banknotes. The arrest brings to fourteen arrests made by the police, since October 2023.

Hong Kong Police Uncovers Elaborate Crypto Fraud Scheme

Lo Yuen-shan, Hong Kong’s Chief Inspector of the Commercial Crime Bureau says the four were arrested on charges of conspiracy to defraud, possession, and use of 5,000 fake banknotes. Out of the four, two of them orchestrated the acquisition of the fake notes while the other two pretended as a business establishment.

The duo obtained the fake notes from a storage facility in Mong Kok and sourced them for potential victims online by posing as a well-known crypto investor. To execute the fraud, they offered tempting conversion rates to the victims and took targets to the storage facility to show off the notes as evidence of their capability to settle transactions.

Legal Repercussions for Counterfeiting

However, after receiving cryptocurrency transfers, the fraudsters decline to make payment. The group of four succeeded in swindling HK $11 million from 12 unsuspecting victims within the space of nine months before they were apprehended.

The police authorities have issued a warning to exercise caution and check glossy notes carefully as they could be fake currency. The four nabbed by the police risk a maximum jail term of 14 years as per Hong Kong laws, for production, circulation and passing of counterfeit notes.

Hong Kong’s Rising Cases of Scam

Malicious actors have been known to employ different tactics to defraud unsuspecting victims of their hard earned crypto assets. Some have even posed as legitimate exchanges. A notable case at the beginning of this year involved a group that posed as a fake version of the centralized crypto exchange MEXC, which was founded in 2018.

Recently, the Hong Kong Securities and Futures Commission (SFC) alerted the public of a scam that involved the use of deepfake videos of Elon Musk to promote a cryptocurrency trading platform known as “Quantum AI.”