Hong Kong police arrest 27 in $46m deepfake crypto romance scam

Hong Kong police have busted a deepfake romance scam that defrauded men of $46 million through fake cryptocurrency investments.

Law enforcement in Hong Kong has busted a multinational crypto romance scam run by a fraud organization using advanced deepfake technology that targeted victims in Hong Kong, Singapore, mainland China and other regions, according to a local report.

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

Romance scams, sometimes referred to as hog-slaughtering scams, involve scammers posing as someone’s love interest to gain their 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 the scam

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

Senior Inspector Fang Chi-kin, who heads the New Territories South regional crime unit, said the syndicate’s victims were even tricked during video calls as the scammers used deepfake technology to replace their appearance and voices with those of attractive women.

Victims were then persuaded to invest in cryptocurrency through fake trading platforms and were even shown fake transaction records claiming 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.

Police said the fraudsters split their operations into several roles, including fraud operations, technical support and accounting. New members, mostly college graduates, were recruited to manage English- or Mandarin-speaking victims and were given training manuals explaining how to build trust with victims, especially in the field of investment.

According to the report, each fraudster involved in the syndicate can earn tens of thousands of Hong Kong dollars per month, while some can earn over HK$100,000. Police are continuing to investigate and are not ruling out the possibility of more arrests.

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

Romance scams are on the rise

Cryptocurrency scammers are becoming increasingly sophisticated with their techniques, and romance scams are just one of their tactics. The rise of artificial intelligence further compounds this challenge by helping fraudsters come up with more convincing schemes.

Over the years, agencies such as the United States Federal Trade Commission and the Federal Bureau of Investigation have warned of an increase in romance scams, especially those involving cryptocurrency.

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 most of the scammers operating in Southeast Asia. In one 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 criminal organization in the area.

Meanwhile, in April, the Virtual Currency Unit at the Brooklyn District Attorney’s Office uncovered a similar scheme targeting victims all over the United States.