Scammers operating out of an industrial complex in Hong Kong were arrested. They stole $46 million from victims using pig butchering scams.
Hong Kong police took down an illicit enterprise in the city that caused financial ruckus to numerous individuals across Mainland China, India, and Singapore. The scammers posed as romantic partners online to gain the confidence of their victims and siphoned at least $46.3 million (360 million Hong Kong dollars) from them through cryptocurrency. These romance scams are often referred to as pig butchering scams in crypto circles.
The scam involved the fake romantic partners pitching a fake crypto investment platform, which the victims put their funds into through digital assets. It goes without saying that they did not receive the promised returns or their funds back.
Beyond crypto, the cybercriminals also made use of AI deepfake technology to convince victims they were interacting with real women and thus lure them into the “investment” trap. The Hong Kong Police Force announced the raid and arrests through a news conference last week.
The scammers operated out of a “scam center” in a 4,000 square feet industrial complex situated in the city’s Hung Hom neighborhood, spending their time targeting men online. They commissioned international developers to build their illicit crypto platform and contracted digital media graduates from local universities and colleges.
Those leading this operation created training manuals for those doing the dirty work of scamming victims, which described how to steal funds from users using deepfake technology and crypto in detail.
As the police raided their compound, they seized numerous items, including over 100 mobile phones that were used for communications and luxury watches. Twenty-seven individuals were arrested, out of which 21 were men. These individuals were aged between 21 and 34 years old. The authorities have charged them with “conspiracy to defraud” and “possession of offensive weapons.”
Earlier this year, scammers in Hong Kong used deepfakes to trick a clerk from a multinational corporation in the city to transfer $25 million (200 million Hong Kong dollars) out of the firm’s pocket. They used deepfakes to generate a video call that led the clerk to believe they were interacting with the company’s officials.
Pig Butchering Scams Grow to Become a Worrisome Trend in Crypto
As deepfake technology poses threats in several ways globally, crypto-related pig butchering scams have become commonplace in the industry. A Chainalysis report from August revealed that such scams netted at least 43% of scam inflows YTD. It also mentioned the scams are mostly orchestrated from South and South East Asia, with a single wallet from Myanmar collecting over $100 million worth of illicit proceeds from such scams since 2022.
