Hong Kong police arrest 27 people over $46 million deepfake crypto romance scam

Hong Kong police have uncovered a deepfake romance scam in which men were defrauded of $46 million through fake cryptocurrency investments.

According to a local report, law enforcement in Hong Kong cracked down on a multinational crypto-romance scam that targeted victims from Hong Kong, Singapore, mainland China and other regions and was operated by a fraud syndicate using advanced deepfake technology.

Police arrested 27 people, including university graduates and suspected members of the Sun-Yee-On triad, who helped carry out the scheme and set up fake trading platforms that tricked victims into investing in fake cryptocurrency investments.

In romance scams, sometimes called pig scams, scammers pose as lovers to gain another person’s trust. They eventually convince their victims to invest in fake cryptocurrency investments that promise lucrative returns and then disappear with the money.

The inner workings of fraud

The syndicate used AI-generated photos of attractive women to create romantic relationships with unsuspecting men online. Victims were later persuaded to invest in what they believed to be legitimate cryptocurrency platforms, only to later find out that they were unable to withdraw funds.

Senior Commissioner Fang Chi-kin, who heads the New Territories South Regional Crime Unit, said the syndicate’s victims were tricked even on video calls as deepfake technology was used to disguise the scammers’ appearances and voices to replace more attractive women.

Victims were then persuaded to invest in cryptocurrencies through the fake trading platforms and were even shown fake transaction records purporting to show profits from their investments.

“They even discussed future plans with the victims, creating a false sense of happiness to encourage them to continue investing,” Fang added.

The fraudsters divided their activities into different roles, including fraud operations, technical support and accounting, police said. Recruits, often college graduates, were hired to mentor English- or Mandarin-speaking victims and were given training manuals on how to build trust with victims, particularly in the area of ​​investments.

According to the report, each fraudster involved in the syndicate could earn tens of thousands of Hong Kong dollars per month, with some even exceeding HK$100,000. The police are continuing the investigation and are not ruling out further arrests.

The scammers had been operating since October 2023 and managed to defraud victims of HK$360 million (approximately US$46 million).

Romance scams are on the rise

Cryptocurrency scammers are becoming increasingly sophisticated in their techniques, and romance scams are just one of their tactics. The rise of AI is compounding the challenge and helping fraudsters carry out more convincing schemes.

Over the years, authorities such as the United States Federal Trade Commission and the Federal Bureau of Investigation have warned about the increase in romance scams, particularly those involving cryptocurrencies.

A study conducted by University of Texas finance professor John Griffin found that romance scams caused over $75 billion in losses from January 2020 to February 2024, with many of the scammers operating from Southeast Asia. In a recent case, a US citizen filed a lawsuit after losing $2.1 million in Bitcoin to one of these pig slaughter scams run by a crime syndicate in the region.

Meanwhile, the Virtual Currency Unit in the Brooklyn District Attorney’s Office uncovered a similar scheme in April that targeted victims across the United States