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Hong Kong police are using the Metaverse to fight crypto crime

Hong Kong police launched a new Web3 platform known as “CyberDefender Metaverse” on Saturday.

To celebrate the launch, the Force hosted its first event, “Exploring the Metaverse,” in virtual space.

Crack down on crypto crimes

During the launch event, Chief Inspector Ip Cheuk-yu of the Cybersecurity and Technology Crime Bureau (CSTCB) discussed the risks posed by Web3. Tell your attendees that crimes like fraud, hacking, theft, and sexual crimes are all threats in the metaverse.

The event also focused on the use of digital assets by modern cybercriminals and the progress made in cracking down on cryptocrime.

in press release That accompanied the launch, Hong Kong police said that in 2022 the city recorded 2,336 virtual asset-related crimes. This resulted in a loss of $1.7 billion for the victims.

And in the first quarter of this year, 663 such cases have already been reported. Worryingly, in just three months, reported losses amounted to $570 million, an increase of 75 percent compared to the first quarter of 2022.

The statement stated that most of these cases relate to the investment of virtual assets. The report warns that “criminals have taken advantage of the public’s lack of knowledge of virtual assets and lured them into non-existent investments.”

Hong Kong regulator updates anti-money laundering rules

Alongside the new metaverse platform, the Hong Kong Securities Regulatory Authority (HKSRC) this week issued updated anti-money laundering (AML) guidelines.

The HKSRC Handbook details how criminals use digital assets to launder money. It then 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 companies that deal with virtual assets. Changes include enhanced Know Your Customer (KYC) and due diligence requirements.

Under the updated guidelines, organizations facilitating crypto transactions of CNY 8,000 or more must collect identifying information about both the sender and the receiver.

The fight against digital crime has become international

With enhanced Know Your Customer rules in place, Hong Kong is stepping up efforts to prevent dirty money from flowing through the city. Companies will have to conduct KYC checks no matter where their customers are located.

So Hong Kong will become a less attractive destination for criminal actors who use cryptocurrencies to hide their identities.

Outside of Hong Kong, other jurisdictions are also adapting their anti-money laundering frameworks to keep pace with the use of digital assets by criminal networks. For example, this week Japan also announced stricter AML rules for cryptocurrency transfers.

Specifically, the country will enforce what is known as a “travel rule”.

With the travel rule in place, cryptocurrency exchanges will need to ensure that details about the sender are shared with other parties.

Ultimately, for crime-fighting efforts to be effective, they must be as international as the criminal networks themselves.
To that end, it was reported last month that the Internal Revenue Service (IRS) would deploy cyber agents internationally to investigate the use of cryptography in financial crimes.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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