Hong Kong Police Crack Down on Stablecoin Scam, Arrest Three Suspects

Hong Kong authorities arrested three individuals after a 77-year-old woman lost HK$3 million in a stablecoin scam at a Sheung Wan currency exchange shop, reported on August 30.

This highlights ongoing crypto scam risks despite regulatory measures, as criminals exploited Hong Kong’s nascent stablecoin regulations, underscoring the importance of investor vigilance in volatile environments.

Hong Kong Police Arrests Shake Up Crypto Security Standards

Hong Kong’s Technology and Financial Crime Unit, led by Inspector Tsang Kin-wah, swiftly targeted a stablecoin scam involving three suspects who defrauded a senior citizen of HK$3 million. The scam unfolded at a virtual currency exchange in Sheung Wan, focusing on retail users.

The event emphasizes vulnerabilities within cash transactions interfacing with cryptocurrencies in Hong Kong, particularly under the new Stablecoin Ordinance enacted in August 2025. Provisional charges have been made, with further arrests possible.

“They should always be mindful of the misleading prospects of gains from short-term price volatility and be wary of unsubstantiated claims, particularly those appearing on social media.” — Julia Leung, CEO, Securities and Futures Commission (SFC)

New Stablecoin Ordinance Underlines Importance of Robust Regulatory Frameworks

Did you know? Hong Kong’s new Stablecoin Ordinance demands strict licensing, arising from an increase in scams exploiting regulatory uncertainties in transitional periods.

CoinMarketCap reports Tether USDt at a stable price of $1.00, with a market cap of $167.59 billion and a 24-hour trading volume of $90.93 billion, marking a 33.94% decrease. The stablecoin’s market dominance stands at 4.45%, with minor fluctuations over recent months.

Experts from Coincu suggest a careful observation of financial regulations influencing cryptocurrency markets. The scam’s fiat focus avoided systemic blockchain impact, but highlights regulatory gaps during market transitions. The Stablecoin Ordinance aims to address these challenges, enhancing oversight and consumer protection.