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Hong Kong authorities have identified a fraud syndicate that used deepfake technology to run a $43 million cryptocurrency romance scam.
The operation resulted in the arrest of 27 individuals, including well-educated university graduates.
According to a local media outlet report, the syndicate has operated from a 4,000-square-foot industrial unit in Hung Hom since October last year.
<h3 class="whitespace-pre-wrap break-words" id="scammers-used-ai-to-create-attractive-female-characters">Scammers used AI to create attractive female characters</h3>
The scammers <a href="https://www.thestar.com.my/aseanplus/aseanplus-news/2024/10/15/hong-kong-fraudsters-use-deepfake-tech-to-swindle-love-struck-men-out-of-rm200mil" rel="noopener noreferrer nofollow" target="_blank">reportedly</a> used artificial intelligence to swap the faces of scammers with those of attractive women during video calls. This deepfake technology allowed the male scammers to create appealing characters.
This helped them to instill trust in victims across Asia, including Singapore, mainland China, Taiwan, and India.
Senior Superintendent Fang Chi-kin revealed that the group recruited university digital media graduates to develop fake trading platforms and manage their online operations.
The scammers initiated contact with victims through social media. They also presented themselves as highly desirable partners with impressive careers and academic backgrounds.
<h3 class="whitespace-pre-wrap break-words" id="scammers-lured-victims-to-invest-in-crypto">Scammers lured victims to invest in crypto</h3>
Once trust was established, the fraudsters introduced cryptocurrency investment opportunities. To lure them into investing, they showed forged trading records to convince victims to invest substantial sums. Many victims only realized they had been scammed when they were unable to withdraw their funds.
During the October 9 raid, police seized over 100 mobile phones, computer equipment, luxury watches, and more than HKD 200,000 in cash. The suspects, aged 21 to 34, face charges of conspiracy to defraud and possession of offensive weapons.
Authorities discovered training documents instructing <a href="https://www.cryptopolitan.com/zachxbt-helps-recover-275k-stolen-from-elder/" rel="noopener noreferrer nofollow">scammers</a> on effective tactics to appeal to victims. They also found a “performance board” highlighting top earners. The most successful scammer reportedly gained $266,000 in a single month.
“They set up a performance board. The teams and members who successfully fooled the most victims were listed on the board. The one who topped the chart last month gained US$266,000,” Superintendent Iu Wing-kan said.
<h3 class="font-600 text-xl font-bold" id="regulatory-developments-in-hong-kong">Regulatory Developments in Hong Kong</h3>
The details of this crypto scam surface as Hong Kong’s cryptocurrency environment is witnessing regulatory scrutiny.
The Hong Kong Securities and Futures Commission (SFC) is currently reviewing nearly a dozen crypto platforms for potential licensing. SFC chief executive Julia Leung <a href="https://www.cryptopolitan.com/hong-kong-sfc-to-license-a-dozen-platforms/" rel="noopener noreferrer nofollow">announced</a> that up to 11 platforms seeking approval to operate crypto businesses have undergone onsite evaluations.
The SFC plans to grant licenses in batches to virtual asset trading platforms (VATPs) to enhance compliance. While these platforms currently operate under “deemed to be licensed” status, the SFC has cautioned traders against engaging with these firms until they are fully licensed.
The SFC’s approach includes granting conditional licenses to compliant platforms and, at the same time, revoking licensing qualifications for those failing to meet <a href="https://www.cryptopolitan.com/chainalysis-diederik-van-wersch-interview/" rel="noopener noreferrer nofollow">regulatory</a> requirements.

$43M deepfake crypto romance scam leads to arrests of Hong Kong university graduates

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