The cryptocurrency industry is currently facing a challenging phase, with the overall crypto market struggling due to exploitations and attacks, coupled with regulatory uncertainty in the United States. It has also been observed that over the past few months, exploitation in the cryptocurrency realm has been rapidly increasing.
Phishing scams target Hong Kong-based Binance customers
Recently, the Hong Kong police issued a warning regarding a series of phishing scams that targeted 11 Hong Kong-based Binance customers. These exploiters claimed to be support executives of Binance and sent messages to users, asking them to confirm their identity details by clicking on links in the messages within a specific deadline.
However, on October 9, 2023, Hong Kong police also issued a warning to cryptocurrency users through a Facebook page named “Cyberdefender,” which aims to raise awareness of ongoing cybersecurity exploitations.
The police also mentioned that when users click on the link and verify their personal information, the attackers gain access to the user’s Binance account and steal all the assets stored in the user’s wallets.
According to the post, due to this phishing scheme, in the last two weeks, the 11 Hong Kong-based Binance users reported a total combined loss of approximately $446,000, equivalent to 3.5 million Hong Kong dollars. Given these staggering losses, Hong Kong police urge users to report such incidents on the website in the “fraud prevention” section.
SFC’s licensing regime and crackdown on unlicensed Crypto exchanges
Additionally, the Hong Kong Securities and Futures Commission (SFC) recently introduced a licensing regime for cryptocurrency exchanges and warned unlicensed crypto exchanges providing their services in Hong Kong that they might face criminal action. As of now, only HashKey and OSL are the two exchanges that are fully licensed in Hong Kong and provide their services.
JPEX scandal and the ongoing impact on Hong Kong investors
However, Hong Kong investors have witnessed scams and fraudulent activities in recent weeks as a result of using the unlicensed crypto exchange JPEX. This fraudulent activity resulted in combined losses of around $180 million, and more than 2,300 Hong Kong-based crypto investors filed complaints with the local police.
The JPEX crypto exchange gained popularity in Hong Kong due to its high returns on lending products, even though it was unlicensed. This JPEX scandal has been the largest cryptocurrency fraud in Hong Kong. Following this massive incident, the SFC is planning to publish a list of both fully licensed crypto exchanges and suspicious crypto exchanges to help combat potential fraud.