QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$191 000 USD
MAY 2022
HONG KONG
NONE
DESCRIPTION OF EVENTS
"A male businessman surnamed Choi (30 years old) who owns a company in Tsim Sha Tsui specialising in crypto currency trading, brought his male staff member (30 years old) and a female staff member surnamed Cheng (26 years old) to a crypto currency exchange shop in Chungking Mansions to trade Tether coins with a male buyer."
"At 1.11pm, the police received a report from a woman who said that she and her employer had met a buyer in “Super Coin” crypto currency exchange shop to trade bitcoins in the Chungking Mansions shopping mall, No. 36 to 44 Nathan Road earlier."
"It is understood that the female staff had previously traded virtual currency with the scammer, and today’s transaction was only possible due to the successful completion of the previous transaction. The two parties originally traded Tether coins worth about 4.5 million Hong Kong dollars, but this round Choi first transferred the Tether coins worth about 1.5 million Hong Kong dollars to the buyer’s account, and the whole transaction was completed before the other party paid the full amount."
"The suspect allegedly lured the victim and two colleagues into the meeting room of a shop in Tsim Sha Tsui." "The virtual currency exchange shop involved has been in business for about a month, and there was a money counter and a tablet computer with no information left in the store." "Tong said the trading location was leased by a shell company for HK$4,000 (US$509) per month in April."
"The shop’s cash register was not connected to a power outlet and the “computer” was an empty box." “Inside the shop, the banknote counter was not connected to electricity. What looked like computers were just empty cases,” said Inspector Tong Sin-tung of the Yau Tsim criminal investigation unit on Wednesday."
"[T]he victim transferred $HK1.5M (US$191,085) to an e-wallet." "The buyer later showed up, obtained the relevant virtual currency transaction link from the three people, and falsely claimed to go to the staff room of the exchange to get cash payment. He then locked the glass front door of the shop before entering the staff room."
"It is believed that someone deliberately committed the crime." "The suspect then exited the premises under the pretense that he would get cash for the victim." "The scammer claimed that when he entered the staff room to get money, he shouted “Please prepare cash in HK$1,000 banknotes!” pretending that there were other people in the staff room in order to reduce the victims’ suspicion."
"After the victim transferred the crypto to the suspect’s wallet, the suspect fled through a side door and locked the victim inside." "He falsely claimed that he needed to go to withdraw money, locked the victims in the shop and left the scene. The victims later realised that they had been deceived, and found that more than HK$1.5 million worth of crypto coins in their account had been transferred away so one of the staff members immediately called the police for help."
"The victim and her colleagues then discovered they were locked in and called the police, who tracked down the victim on Tuesday in Sham Shui Po in northern Kowloon."
"Police officers blocked the currency exchange shop involved in the case, and checked the CCTV footage of the entrance and exit of the mall to track down the whereabouts of the suspect involved. The case is temporarily handed over to the Yau Tsim Police District Criminal Investigation Team for follow-up."
"Hong Kong police announced on Tuesday the arrest of a 24-year-old who is suspected of stealing HK$1.5 million (US$191,076) in cryptocurrencies in a physical cash-to-crypto transaction." "The police labeled the rare on-site cryptocurrency theft as a serious crime punishable by 10 years in prison, if convicted." "[The] 24-year-old man was arrested by Hong Kong police Tuesday for allegedly stealing [the] funds from a Hong Kong citizen, an offense punishable by up to ten years in prison."
"Hong Kong police spokeswoman Tong Sin-tung said at a Wednesday press conference the suspect had a face-to-face cryptocurrency transaction with the victim at a business located in tourist hub Tsim Sha Tsui on May 4. "
"The police have not recovered any money but seized some of the suspect’s personal effects from the bogus shop, which had been rented under the name of a shell company."
"Tong said the police are seeking to determine if the suspect was working alone, adding that the ongoing investigation could result in further arrests."
In Tsim Sha Tsui, a region of Hong Kong, a group of business-people were tricked out of $1.5m HKD (~$191k USD). They had previously transacted with the trader for an even larger sum without issue. They were led to a room which was full of fake equipment and made their transfer. The trader then locked the front door and headed into the other room, pretending to talk to others in the room to prepare the funds but instead leaving through a back entrance. Police were called and ultimately managed to apprehend the suspect. It is unclear if any of the funds were recovered.
HOW COULD THIS HAVE BEEN PREVENTED?
The simplest way to avoid this situation is to be sure that you have physical visibility of the cash prior to authorizing any irreversible payment. Performing transactions in multiple stages or using an escrow agent to temporarily hold the funds can further the safety of such transactions.
Suspect Arrested in Hong Kong for Scamming Crypto Trader out of HK$1.5M (May 31)
Suspect Arrested in Hong Kong for Scamming Crypto Trader out of HK$1.5M - BeInCrypto (Jul 2)
Hong Kong police arrest suspect in nearly $200,000 crypto theft (Jul 3)
Suspect Arrested in Hong Kong for Scamming Cryptocurrency Trader Out of HK$1.5M - CryptoSaurus (Jul 3)
Suspect Arrested in Hong Kong for Scamming Crypto Trader out of HK$1.5M - BeInCrypto - Crypto News (Jul 3)
Businessman scammed over HK$1.5m worth of Tether coins at currency exchange shop in Chungking Mansions (Updated: 11pm) - Dimsum Daily (Jul 3)
https://www.facebook.com/HongKongPoliceForce/videos/416486499952181 (Jul 3)
Chungking Mansions - Wikipedia (Jun 13)
Fortune Foodie Promotion For Super Coin - WhatsApp (Jun 13)
Contact - Dimsum Daily (Apr 14)
