Hong Kong authorities have arrested four individuals, including a 14-year-old, in connection with a sophisticated cryptocurrency scam that resulted in losses totaling HK$11 million (US$1.4 million). The suspects used counterfeit banknotes to defraud unsuspecting cryptocurrency owners, highlighting a growing trend of digital asset-related fraud in the region.

The arrests were made on July 26, with the police detaining individuals aged between 14 and 39. This brings the total number of arrests related to this case to 14 since October last year. The operation was orchestrated by a syndicate that meticulously planned each role within the group. Two key suspects, identified as the masterminds, procured counterfeit banknotes from a storage facility in Mong Kok and set up a fake business front nearby.

Posing as a reputable cryptocurrency investor, the fraudsters lured victims with enticing offers above the market rate. Once at the fake store, victims were shown stacks of HK$1,000 notes, with only the top and bottom notes being genuine, tricking them into believing the entire stack was real. The scammers insisted on online transactions, ensuring the victims had no way of verifying the notes' authenticity.

Once the cryptocurrency was transferred, the scammers swiftly moved the assets out of the victims' reach, leaving them empty-handed. Chief Inspector Lo Yuen-shan from the Commercial Crime Bureau emphasized that such tactics have become increasingly common, with 12 victims reported in this particular scheme alone.

In a broader context, this case underscores the challenges law enforcement faces in combating financial fraud, especially involving digital currencies. The situation is compounded by ongoing global efforts to apprehend two Hong Kong crypto influencers linked to the troubled JPEX exchange in Dubai, who are wanted for theft, fraud, and money laundering. Interpol is actively involved in the international manhunt.

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