Hong Kong Police Release Details of USDT Fraud Case in Aim to Raise Awareness of Crypto Scams

Hong Kong Police Release Details of USDT Fraud Case in Aim to Raise Awareness of Crypto Scams
Source: iStock/AzriSuratmin

Hong Kong police have started releasing details of crypto fraud cases – in hopes that the public will learn valuable lessons from cases that have seen people lose thousands of dollars to bad guys in crypto.

By Takungpao said the move is part of the Eastern District Police Force’s “Operation Shield” program – a campaign to “raise awareness of fraud and fraud prevention.” Officers said fraud cases are on the rise in Hong Kong, with crypto scams being a particularly fast growing trend.

Police said that on average, fraudsters claim a cumulative USD 2.5 million per day from Hong Kong-based victims.

The program will see police publish case details in a monthly magazine – and started with the case of an engineer who was allegedly stung by crypto scammers to the tune of nearly $1 million.

The victim, police said, went to a police station to file a report on July 23 this year, saying she had been approached by other users of the social media platform and WeChat chat apps. These people had introduced him to what turned out to be a “fraudulent virtual currency investment platform” that offered investors high returns.

The fake platform appears to have been very sophisticated in nature. The engineer explained that he had “opened an account” on the platform, “as instructed by customer service”.

Over the course of 10 days in July, police said, the engineer then carried out 28 tether (USDT) deposits into what later turned out to be “numerous puppet accounts held by the fraudsters”.

At first, the victim seemed to believe that his “investments” had paid off, as the interface of the platform seemed to show that he was making a profit. At this point, “he was not a suspect,” the officers continued.

But things quickly went downhill when the engineer tried to leave while he was in front. He attempted to withdraw his funds, but was soon “asked to pay a huge processing fee”.

Soon his “so-called ‘investment account'” was suspended, and the victim’s funds – apparently half of his savings – evaporated.

Scams involving USDT and other USD-pegged stablecoins have been on the rise in Hong Kong and mainland China in recent years.

While Beijing has cracked down heavily on crypto in recent years, Bitcoin (BTC) markets have become increasingly difficult to access – despite relatively high levels of demand for BTC. As such, mainland-based traders are increasingly keen to get their hands on USDT and other stablecoins with the aim of buying bitcoin through over-the-counter (OTC) markets. This has led to an increase in USDT-related activity in Hong Kong and other Asian regions, as well as an increase in USDT-themed scams.
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