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Rise in Counterfeit Currency Linked to Crypto Frauds in Hong Kong

Hong Kong police have warned about a rise in counterfeit banknotes linked to crypto frauds. This trend poses significant challenges for law enforcement and regulatory bodies.

According to the South China Morning Post, authorities seized 3,396 fake notes from January to April. This is a sharp increase from 553 bills seized during the same period last year, totaling HK$2.55 million (~$326,130).

A Hong Kong police officer displaying seized counterfeit banknotes linked to crypto fraud cases.
Source: Coinbackyard

Counterfeit Notes in Crypto Transactions

Many of these counterfeit notes were intended for use in crypto transactions. Police reported seizing 1,693 “training notes” and 347 low-quality counterfeit bills in three major crypto scam cases. Police arrested three individuals in connection with these cases.

Training notes resemble real currency but have Chinese characters reading “practice coupons.” The rise in counterfeit HK$1,000 notes, totaling 2,053 this year, is particularly alarming. The number of fake HK$500 notes more than quadrupled to 919. Other denominations, including HK$100, HK$50, HK$20, and HK$10, were also affected but to a lesser extent.

Police Advice and Public Awareness

A police spokesperson noted the poor quality of most counterfeits. They advised the public to check security features like the dynamic shimmering pattern and windowed metallic thread unique to genuine Hong Kong currency.

Strengthening Crypto Regulation

Hong Kong is also strengthening its crypto regulatory framework. The Securities and Futures Commission (SFC) recently listed 11 crypto exchange platforms as “deemed to be licensed.” They aim to prevent money laundering and ensure a secure trading environment by excluding services to mainland Chinese users.

Future Initiatives

Discussions are underway to integrate staking mechanisms into Ethereum (ETH) exchange-traded funds (ETFs). This initiative could provide new investment opportunities and enhance Hong Kong’s appeal as a financial hub.

Ongoing efforts to improve security measures and regulatory oversight are crucial. They help maintain public trust and ensure the integrity of both financial and digital marketplaces.

June 3, 2024 at 11:10 am

Updated June 3, 2024 at 11:10 am

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