Virtual Commodities Trading (Bitcoin) Fight Scams Together

As advised by the Hong Kong Monetary Authority, bitcoin is not considered as legal tender but a virtual commodity, which is not backed by any physical items, issuers or the real economy, so it has no fixed value.  Bitcoins are outside the regulatory ambit of the Hong Kong Monetary Authority.

Virtual commodities pose considerable security risks to consumers. The possible cyber-security loopholes of the trading platforms may lead to the loss of virtual commodities.

In addition, some fraudsters offered fraudulent bitcoin related investment opportunities, boasting the benefits of virtual commodities transactions. Some victims were lured to buy ‘Bitcoin Mining Contracts’ through online trading platform by guaranteeing promising returns.  Initially, victims gained profits thus carried on to invest more, or to encourage friends and relatives to join. The trading platform later suddenly ceased operation and fraudsters flee with victims’funds.

Due to the anonymous nature of virtual commodities transactions, there have been criminals using bitcoins as a means of money laundering.

What is our Advice?

  • Bitcoin is not money, but a highly speculative virtual commodity, people should pay more attention to the risk when trading or engaging in related investment activities;
  • Do not blindly believe in any investment opportunities referred by friends or relatives, because they may not be aware that they have already fallen prey to an investment trap;
  • Do not download software or application of suspicious origin or nature;
  • Pay attention to computer security, install anti-virus software, firewall and the latest security patches;
  • When you come across any property, which you know or suspect to be crime proceeds, you should make a suspicious transaction report (STR) to the Joint Financial Intelligence Unit (JFIU); and
  • If in doubt, contact the Police immediately.