In a significant crackdown on financial fraud, Hong Kong police have arrested four individuals, including a 14-year-old, for their involvement in a syndicate using counterfeit banknotes to defraud cryptocurrency owners.

The arrests are part of ongoing efforts by law enforcement to combat the rise in crypto-related scams in the region.

The operation, reported by local media, resulted in losses of up to HK$11 million (US$1.4 million).

Chief Inspector Lo Yuen-shan of the Commercial Crime Bureau revealed that these arrests bring the total number of individuals apprehended in connection with these scams to 14 since October of last year.

The suspects, aged between 14 and 39, were detained on July 26, on charges of conspiracy to defraud and possessing and using 5,000 counterfeit banknotes.

The police outlined the structured nature of the syndicate, with each member assigned specific roles.

Two of the suspects, identified as the masterminds, were responsible for procuring fake banknotes from a mini storage facility in Mong Kok.

They disguised a nearby location as a legitimate business, impersonating a well-known cryptocurrency investor to lure victims with offers above the current market price for digital currencies.

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The scheme involved inviting victims to the fake store, where they were shown stacks of counterfeit HK$1,000 ($128) banknotes.

The top and bottom notes were real, deceiving victims into believing the entire stack was genuine.

The suspects prohibited the victims from untying the stacks, insisting on online transactions to finalize the deal.

Once the cryptocurrency was transferred, the scammers swiftly moved the assets out of the account and refused to pay, leaving the victims with nothing.

Chief Inspector Lo noted that these tactics have become common in recent cases, with the group and others defrauding 12 victims of HK$11 million (US$1.4 million) from October 2023 until the arrest.

The arrests underscore the ongoing battle against financial fraud in Hong Kong, particularly involving digital currencies.

Meanwhile, a global manhunt is underway for two well-known Hong Kong crypto influencers, previously linked to the JPEX exchange in Dubai, who are facing allegations of theft, fraud, and money laundering, prompting Interpol to take action.

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