In a shocking development for Hong Kong’s cryptocurrency industry, a scam involving “Hell Money” led to the arrest of three employees of a cryptocurrency exchange shop in Tsim Sha Tsui.
The suspects allegedly deceived a customer into transferring 1 million Hong Kong dollars (approximately $127,500) worth of Tether (USDT) in exchange for counterfeit coins traditionally used in Chinese ceremonies. The incident marks a worrying trend in the misuse of digital currencies for fraudulent activities.
Crypto Scam: Arrests and Police Investigation
The scam came to light when a 35-year-old man reported to the Hong Kong Police Force (HKPF) that he was unable to receive any real currency after trying to exchange cryptocurrencies at a store.
He was shown piles of what looked like cash but were actually “hell notes” – paper money intended as offerings to the dead rather than as legal tender. Exposure of the scam prompted police to take immediate action.
The Technology Crime Unit of the Hong Kong Police acted quickly and arrested three men, aged 31 to 34, involved in the fraud.
During the investigation, police seized 3,000 Hell Notes, a safe and a money counting machine, suggesting the scam was deliberate. The suspect convinced the victim to transfer his USDT to his own wallet, only to be offered worthless paper in return and then fled the scene.
It’s worth noting that this type of fraud can have serious legal consequences for the perpetrators. Hong Kong law stipulates that fraud is punishable by up to 14 years in prison. Suspects may also be held liable for obtaining property by deception, which carries a maximum sentence of 10 years in prison.
Precautions and wider implications
In response to this and similar incidents, the Hong Kong Police Force issued an advisory urging the public to only use “licensed and authorized cryptocurrency exchanges.”
They emphasized the importance of “checking banknotes” and “being vigilant about the authenticity of currency received in transactions,” the report said.
Furthermore, this incident is part of a larger pattern of cryptocurrency-related scams in the region. Last month, Hong Kong customs officials arrested three individuals suspected of laundering HK$1.8 billion ($228 million) using cryptocurrency platforms and bank accounts linked to shell companies.
These operations highlight the sophisticated methods used by criminals to exploit the digital financial ecosystem.
Yang Yide, leader of the financial investigation team of the General Administration of Customs, pointed out that there are difficulties in investigating these crimes due to the inherent “anonymity” and lack of “jurisdictional scope” of cryptocurrencies.
Young said the department relies heavily on intelligence, fund flow analysis and comprehensive financial investigations to combat such illegal cryptocurrency activities.
Featured images from Unsplash, charts from TradingView
