Hong Kong police bust $46M deepfake crypto scam operation

Hong Kong authorities have dismantled an alleged scam operation involving artificial intelligence (AI) deepfakes, which defrauded victims of more than $46 million. 

According to Hong Kong Police, the group used deepfake technology to create convincing fake profiles, luring victims into believing they were building romantic relationships before steering them into fraudulent crypto investments. 

The operation was based in a 4,000-square-foot industrial facility in Hung Hom, targeting mainly men from mainland China, Taiwan, India, and Singapore. 

The suspects, aged between 21 and 34, included 27 individuals, of which 21 were men. 

They were charged with “conspiracy to defraud” and other offenses. 

Police seized numerous devices, including computers, luxury items, and over 100 mobile phones during the raid conducted on October 9. 

The scam ring reportedly recruited university graduates specialising in digital media and hired overseas IT professionals to build a fake crypto investment platform. 

According to local media, the group even developed training manuals to instruct members on how to execute the AI deepfake scams effectively. 

The elaborate operation used deepfake technology to manipulate victims by posing as real women, creating a facade of romantic interest to build trust. 

Once convinced, victims were persuaded to invest in a fraudulent crypto scheme, leading to a total loss of $46.3 million (HK$360 million). 

Earlier in 2023, similar tactics involving deepfakes were used to trick a finance firm employee in Hong Kong into transferring $25 million by impersonating executives during an online meeting. 

Authorities have warned the public about these deceptive practices, emphasising the risks associated with new AI-powered fraud methods. 

Data from Chainalysis highlighted that crypto-related scams have become increasingly sophisticated, with romance scams alone doubling year-on-year since 2020. 

In 2023, crypto scammers globally stole $4.6 billion, underlining the continued threat of digital fraud in the crypto sector.