Hong Kong Police have arrested 27 individuals as suspects linked to a $46 million crypto romance scam that affected victims across Asia, including Taiwan, Singapore, and India.
The detention of the 21 male and six female suspects, who were between the ages of 21 and 34, comes after the police raid on a Hung Hom industrial unit suspected to be the gang’s operational base. During the raid, the police seized 100 cell phones, nearly $26,000 in cash, and luxury watches.
The $46M Crypto Scam Model
The police have been investigating the scam since August and have made some discoveries. The fraud usually begins with a simple text message. The scammer, posing as an attractive woman, claims to have mistakenly added the wrong number. However, this innocent-sounding message was just the beginning of a rip-off.
The scammers would then build an online romance with their victim, fostering a sense of intimacy and trust. Using artificial intelligence (AI) generated deepfakes, they would share personal stories with their victims and, before long, start planning a future together.
Following months of emotional manipulation and relationship-building, the scammers exploit their victims’ trust, coaxing them into investing in a fraudulent crypto platform. Unwittingly, the victims surrender their assets, falling prey to the scammers’ deceit.
An Organized Gang
According to local police, the gang predominantly includes well-educated individuals with degrees in digital media and technology from local universities. The gang allegedly recruited these young professionals to leverage their expertise.
These young graduates collaborate with overseas IT specialists to develop a fake crypto platform, which was used to deceive victims into making investments.
Educated members helped the scam gang be well organized. They had departments dedicated to different stages of the scam and even used a training manual. This manual taught members how to exploit their victims’ emotions and convince them to invest in their fake crypto platform.
The $46 million crypto scam highlights the growing threat of cyber crimes. As law enforcement agencies work to track and prosecute offenders, investors should remain vigilant and take proactive measures to safeguard their assets.
Pig-Butchering Crypto Scams on the Rise
A study by University of Texas finance professor John Griffin and graduate student Kevin Mei uncovered $75 billion in crypto flows from victims to scammers in pig-butchering scams from January 2020 to February 2024.
The scammers, based mainly in Southeast Asia, use blockchain tracing tools to move funds to crypto platforms. $15 billion came from five exchanges, including Coinbase. These exchanges have cooperated with law enforcement in some cases but argue that tracing and freezing scam funds is challenging.
