Hong Kong police have dismantled a deepfake romance scam that swindled men out 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, which targeted victims from Hong Kong, Singapore, mainland China, and other regions, and was run by a fraud syndicate using advanced deepfake technology.
Police arrested 27 people, including university graduates and suspected Sun Yee On triad members, who helped run the scheme and set up fake trading platforms that tricked victims into investing in bogus cryptocurrency investments.
Romance scams, sometimes called pig butchering scams, involve scammers posing as love interests to gain someone’s trust. They eventually convince their victims to invest in fake cryptocurrency investments promising lucrative returns, then vanish with the money.
The inner workings of the scam
The syndicate used AI-generated photos of attractive women to initiate online romantic relationships with unsuspecting men. The victims were later persuaded to invest in what they believed to be legitimate cryptocurrency platforms, only to find out later that they could not withdraw any funds.
Senior Superintendent Fang Chi-kin, who heads the New Territories South regional crime unit, said that the syndicate’s victims were tricked even during video calls, as deepfake technology was used to replace the scammers’ appearances and voices with those of attractive women.
Victims were then persuaded into making investments in cryptocurrency via the fake trading platforms and were even shown fake transaction records that claimed to show profits on 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 operations into various roles, including scam operations, technical support, and accounting, police said. Recruits, often university graduates, were hired to manage English-speaking or Mandarin-speaking victims and were given training manuals outlining how to build trust with victims, particularly in the area of investment.
Per the report, each fraudster involved in the syndicate could earn tens of thousands of Hong Kong dollars per month, with some earning over HK$100,000. The police are continuing investigations and have not ruled out further arrests.
The scammers had been operating since October 2023 and managed to defraud victims out of HK$360 million (roughly $46 million.)
Romance scams on the rise
Cryptocurrency scammers are getting more sophisticated with their techniques, and romance scams are just one of their tactics. The rise of AI is adding to the challenge, helping scammers pull off more convincing schemes.
Over the years, agencies like the United States Federal Trade Commission and the Federal Bureau of Investigation have warned of the rise in romance scams, particularly those involving cryptocurrency.
A study led by University of Texas finance professor John Griffin revealed that romance scams caused over $75 billion in losses from January 2020 to February 2024, with many of the scammers operating out of Southeast Asia. In a recent case, a U.S. citizen filed a lawsuit after losing $2.1 million in Bitcoin to one of these pig butchering scams run by a crime syndicate in the region.
Meanwhile, in April, the Virtual Currency Unit within the Brooklyn District Attorney’s Office uncovered a similar scheme targeting victims all across the U.S.
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