According to local media reports, the Hong Kong police launched a new Web3 platform known as “CyberDefender Metaverse” during the weekend. At the launch, the department also hosted its first event “Exploring the Metaverse” in the virtual space.
Addressing the gathering, Ip Cheuk-yu, Chief Inspector of the Cyber Security and Technology Crime Bureau (CSTCB), discussed in detail the dangers posed by Web3. He said that crimes such as fraud, hacking, theft and sexual offenses are all threats in the metaverse.
Further, various speakers at the event focused on the use of digital assets by present day cybercriminals and the progress that has been made in stamping out crypto crime. In their press release, the Hong Kong police said that last year the city recorded 2336 virtual asset-related crime resulting in a loss of $1.7 billion for victims.
As per data, as of the first quarter of this year, 663 such cases related to Web3 exploitation have already been reported. Notably, in just three months reported losses amounted to $570 million, a 75 percent increase compared to the first quarter of 2022. According to the press release, most of these cases involved virtual asset investment. It stated:
Criminals took advantage of the public’s lack of knowledge about virtual assets and lured them into non-existent investments.
Notably, the Hong Kong authorities are progressing on ensuring utmost safety in the virtual space. Alongside the new metaverse platform, this week the Hong Kong Securities Regulatory Commission (HKSRC) issued updated anti-money laundering (AML) guidelines. The regulator’s guide details how criminals use digital assets to launder money.
Further, it expands on the steps financial institutions can take to protect themselves from being caught up in illegal activities. The new rules will apply to all firms that deal with virtual assets. As per the new guidelines, entities that facilitate crypto transactions at a specified threshold or more must collect identifying information about both the sender and receiver.
While in pursuit of becoming a crypto hub, Hong Kong has been welcoming investments from digital assets companies, it has also been implementing rules on the sector to ensure protection. With the strict KYC policies, the region is ramping up efforts to prevent money laundering. Companies will have to carry out KYC checks regardless of where their clients are based.
This will make Hong Kong a less attractive destination for criminal actors using crypto to hide their identities. Alarmed by the events in the sector, the regulator has also set out new rules for the industry which will come into effect from June 1. It will allow licensed cryptocurrency trading platforms to offer services to retail investors while implementing measures to protect individual traders.
While Hong Kong’s police adoption of metaverse is a creative step to combat crimes, it is not the only enforcement agency to do so. In October, the International Criminal Police Organization (Interpol) launched what it called the first-ever metaverse designed for law enforcement globally and is said to be fully operational now.