Authorities in Hong Kong have identified a rise in counterfeit banknotes entering circulation through cryptocurrency scams. According to a local report, the Hong Kong police seized 3,396 fake notes between January and April 2024. The counterfeits had a total face value of HK$2.55 million, approximately $326,130.

Three major cryptocurrency scams have contributed significantly to these fake notes in circulation. In one instance, a fraudster set up a bogus cryptocurrency exchange in Tsim Sha Tsui. An unsuspecting woman exchanged HK$1 million in Tether’s USDT stablecoin and received fake HK$1,000 notes in return. Another individual also lost HK$1 million in a similar scam involving USDT.

Hong Kong police have seized 1,693 “training notes” and 347 low-quality counterfeit bills linked to these scams. Training notes are used to train bank staff and closely resemble actual currency. The police have arrested three individuals connected to these fraudulent activities, and the funds have been confiscated.

Earlier this year, authorities also apprehended 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 and resemble real currency closely. The public has been urged to surrender counterfeit notes to the police to avoid committing the offense of passing counterfeit notes.

Recently, the Hong Kong police have also observed a significant increase in cryptocurrency-related crimes. Reported cases surged from 2,336 to 3,415 within a year, resulting in a loss of approximately $553 million. These scams mainly involve two tactics:

  • Transferring Funds: Scammers convince victims to transfer funds to their wallets, often seen in pig butchering scams.
  • Leveraging Hype: Scammers exploit the growing interest in cryptocurrencies and the lack of understanding among victims to defraud them.

This rise in crypto crimes has led to heightened scrutiny. Hong Kong’s securities regulator has established a licensing regime for crypto service providers. Concurrently, Chinese authorities have agreed to collaborate with the United Arab Emirates (UAE) to combat cyber crimes.

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