More than 200 victims from about 20 countries lost at least US$70 million (HK$546 million) in dating and investment scams involving the cryptocurrency OEN sold on now-defunct crypto-exchanges with suspected links to Hong Kong.
Fraudsters posing as attractive Chinese women first approached victims on dating apps and persuaded them to make cryptocurrency investments on WhatsApp via texting and voice messages in English, three international investors told The Standard.
They were talked into buying legitimate cryptocurrencies before trading them for OEN coins on two websites Bitfex.pro and Bitfex.vip, which they suspected were using Hong Kong-based servers.
As soon as victims attempted to withdraw the promised profits from the investments, they were told to buy even more cryptocurrencies.
The victims were eventually left empty-handed and the fraudsters disappeared.
One lost about US$100,900.
Bitfex.pro and Bitfex.vip were believed to be sister websites, as both were registered in Jilin, China and under the same ID – though now untraceable to IP locations.
And Bitfex.pro was allegedly the sister website of the Hong Kong-based oen.asia – which markets OEN and is still up, since both were registered under Xu Weidong last September.
Xu was suspected to be behind at least five similar scam websites, with another two ongoingly selling different cryptocurrencies IEPN and Covid coins.
Victims therefore believed that Bitfex.pro and Bitfex.vip were Hong Kong-based before both went defunct.
But earlier this month, Hong Kong police said they were not convinced the two websites’ servers or the syndicate were Hong Kong-based, and are unlikely to continue investigations after probing the case for a month.
“I am sorry to inform you the case has no relation with Hong Kong because the websites’ IP locations can change every time,” police said.
It is another setback for the victims, who have gone through law enforcement agencies in many countries trying to seek justice in the digital era, when scams easily spread across jurisdictions, making it more difficult to trace them.
About 15 of the victims lodged reports with Hong Kong police in February. Officers started an investigation last month, but came to no conclusion. Later, victims, in the hope that the officers would reactivate the probe, reminded the police that some of the scammers used Hong Kong numbers.
Christian, an engineer in Germany, was the person who found victims with similar experience online and started a Telegram group to gather their cases in January.
He became curious about OEN investments when “a Chinese woman named Li” approached him over messaging app Ablo in December.
Every day over the course of about two months the so-called Li messaged him about her success in OEN investments.
Between mid-December and early January, Christian traded Bitcoins for OEN coins on Bitfex.vip.
“My profit doubled within a short period of time, so I continued to invest,” he said.
But a week later, he failed to withdraw money from the investments and that was when he realized he had been duped.
Christian said the scam’s “professional” operational mode clouded his judgment.
Losing US$25,000 in the scam has caused him deep distress. “The sum is more than what I earn from my job in a year. I felt bad and hated myself,” he said.
He said the Hong Kong police were reluctant to pursue the case.
“Other victims and I have tried everything – we even wrote to the Chinese embassy in Germany and Binance [one of the world’s largest crypto-exchanges] for help,” he said.
Raj, 31, an Indian banker based in Switzerland, has not got over the trauma of a fake love affair that made him lose 24,500 francs (HK$207,094).
He chatted with “a woman named Bella,” who claimed she was from the mainland, on Tinder and WhatsApp in October.
She talked him into an OEN investment.
Raj was told to buy Bitcoins from crypto-exchange Kraken in exchange for OEN coins on Bitfex.pro to make investments.
Meanwhile, to check Bella’s real identity, Raj ran an image search online that led to a Taiwanese woman on Instagram instead.
“I later contacted the Taiwanese police as well, who tried calling Bella, with her subsequently blocking me on WhatsApp,” he said.
Vincent, 32, a marine engineer in the UK, said he lost up to £2,500 (HK$26,749) in the scams.
He talked to a self-claimed mainland woman named Chen Xiao on dating app Tinder and then WhatsApp last October, with the woman drawing him into OEN investment.
“Chen also told me the investment’s profits would be 20 to 30 times greater than before in the next few months,” he said.
“She branded it as the inside information from her uncle — a senior executive at a securities firm — and his friends, who are Wall Street analysts.”
After buying OEN coins on Bitfex.pro, he tried to withdraw the profits but in vain.
He confronted Chen on WhatsApp and she blocked him.
“I am now not very trusting of anyone and sadly have an unfavorable opinion of Hong Kong — a place which I have visited on many occasions and have family,” he said.
Five months later, he discovered that one of the phone numbers used by Chen was active again.
However, the WhatsApp photo with the number was now a Caucasian man.
The three investors said, like other victims, all or most of the crypto coins they bought for trading OEN coins ended up in Binance’s e-wallets.
“There were crypto coins worth at least US$70 million (HK$546 million) in the e-wallets after we tracked the coins’ transfers, but Binance did nothing to intervene,” Vincent said.
Binance has recently been embroiled in a string of crackdowns by global regulators.
Reports say that it has been encouraging money laundering activities of crypto criminals due to lax supervision.
Last Friday, Hong Kong’s Securities and Futures Commission said Binance was not licensed to carry out regulated activities in the SAR, including selling ‘stock tokens’, or it would be subject to criminal sanctions.
‘Stock tokens’ are digital versions of equities pegged to the value of the relevant share. They are usually bought and sold in fractional units, unlike traditional equities.