Hong Kong Launches Meta Verse to Combat Crypto Crime
CyberDefender Metaverse is the first metaverse platform launched by Hong Kong Police to combat crypto theft. An event commemorating the launch, “Exploring the Metaverse,” was held in the virtual space on Saturday, May 27th, to celebrate the launch.
The Hong Kong Police Department launched a metaverse platform to combat financial crime and illegal activities. A chief inspector from the Cyber Security and Technology Crime Bureau (CSTCB) delivered a presentation at the launch event regarding Web3 dangers. In his presentation, he pointed out that various crimes, such as fraud, hacking, theft, and sexual crimes, can be committed in the metaverse. The event also focused on how cybercriminals use digital assets and how crypto-crime has been eradicated.
The press release stated the Hong Kong police recorded 2336 crimes related to virtual assets in 2022. This resulted in victims losing $1.7 billion. There have already been 663 reported cases of this in the first quarter of this year. It is alarming to note that reported losses have increased by 75% since Q1 2022, and they amounted to $570 million in only three months.
According to the release, virtual asset investments were most often involved in these cases. “Criminals took advantage of the public’s lack of knowledge about virtual assets and lured them into non-existent investments,” it warned.
AML recommendations were unveiled by the Hong Kong Securities Regulatory Commission (HKSRC) this week, along with the new metaverse platform. As described in the HKSRC’s guide, digital assets were used by criminals to launder money. Next, it discussed ways for financial institutions to prevent illegal activity from affecting them.
The new rules will affect every company that deals with virtual assets. Several changes have been made to the due diligence requirements and Know Your Customer (KYC). Crypto transactions valued at over 8000 RMB will require institutions to collect identifying information from both senders and receivers. Hong Kong is enforcing a stricter KYC regime to deter dirty money from entering the territory. Companies must conduct KYC checks regardless of their client’s location.
Due to this, Hong Kong will be less appealing to criminals using cryptography to conceal their identities. Hong Kong is not the only jurisdiction modifying its anti-money laundering framework to keep up with criminal organisations’ use of digital assets. Other jurisdictions are doing the same. This week, the Japanese government has also announced stricter AML guidelines for crypto transfers.
According to reports, the country will adopt a “travel rule” requiring cryptocurrency exchanges to share information about senders. To combat crime effectively, criminal networks must be fought internationally. Thus, last month, the Internal Revenue Service (IRS) announced that cyber agents would be deployed around the globe to investigate crypto fraud.
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