- Three Bitcoin ATM crooks in Hong Kong are thought to be part of a wider syndicate
- Hong Kong police arrested the three after $30,000 was stolen from 11 ATMs
- Six mobile phones were seized as part of the investigation, the first of its kind in the country
Three men arrested in Hong Kong over scamming Bitcoin ATM machines into handing out free cash are thought to be part of a larger syndicate, according to Hong Kong police. The South China Morning Post revealed the arrest of the trio over the weekend, alleging that they cheated Bitcoin ATMs out of nearly HK$230,000 (US$30,000) using undisclosed loopholes, but police suspect them of being part of a bigger syndicate operating in the country.
Bitcoin ATM Loopholes Exploited by Gang
Hong Kong police were made aware of the scam by two cryptocurrency exchanges who filed reports of irregularities with the machines, suspecting that those responsible had taken advantage of loopholes in the ATMs which led them to be able to withdraw cash without official authorizations.
Police haven’t revealed exactly what loopholes were exploited for obvious reasons, except to say that they probably involved bypassing the verification process. The case is the first recorded in Hong Kong involving Bitcoin ATM fraud, but it won’t be the last if the police’s suspicion that the trio are part of a wider network of Bitcoin ATM fraudsters.
Gang Not Working Alone
If the police initially thought that the trio were acting on their own they were quickly disabused of this notion, with cash and six mobile phones recovered as part of the investigation. Superintendent Wilson Tam Wai-shun of the cyber security and technology crime bureau said on Saturday that the men in fact represented the “core members behind the syndicate” and refused to rule out further arrests, showing that the Bitcoin ATM scam is more widespread than they first assumed.