Three suspects who stole almost US$30,000 [AUS$41,380] in cash from Bitcoin ATM machines in Hong Kong have been arrested.
The three men are between the ages of 26 and 55, and police believe they are part of a larger criminal syndicate.
Cheating the system for cash
The men found a way to withdraw cash from multiple Bitcoin ATMs. Police were alerted to the crime by two cryptocurrency exchanges who filed charges.
How the culprits were able to bypass verification security has not been revealed by the police. Superintendent Wilson Tam Wai-shun of the cybersecurity and technology crime bureau only said, “I cannot reveal what the loopholes are. But any bitcoin transaction needs verification. Maybe the ring bypassed the verifying process before taking the money.”
He added, “We have offered security advice to the two companies and believe they will upgrade their systems. It is the first time we came across fraud linked to bitcoin ATMs.”
Overall, the three suspects stole a total of HK$226,000 [AUS$40,220] in cash from six separate Bitcoin ATM machines. There were a total of 11 transactions made, and the largest transaction was for HK$54,000 [AUS$6,906].
The three men, who claim to be unemployed, were arrested on charges of conspiracy to defraud.
Bitcoin ATM numbers
The number of Bitcoin ATM machines available for public use continues to grow on a daily basis. According to Coin ATM Radar, there are currently 9,164 cryptocurrency ATMs across the globe. The scale of growth is phenomenal as 18.3 machines are installed every single day.
The vast majority of crypto ATMs (84.4%) are found in North America. Overall, there are 57 Bitcoin ATM machines located in Hong Kong.
Authorities in Hong Kong consider Bitcoin a virtual commodity and not legal tender. The Securities and Futures Commission (SFC) issued a statement in September 2017 that said digital tokens issued in ICOs were shares in a collective investment scheme and would, therefore, be considered securities.
The SFC noted, “In such cases, dealing in or advising on the digital tokens, or managing or marketing a fund investing in such digital tokens, might constitute a regulated activity and would require registration or a license from the SFC.”
In other financial and legal news for Hong Kong, the United States just ended three agreements between the U.S. and Hong Kong. These agreements included tax exemptions and extraditions. The reason for this move is due to the government of China suppressing freedoms promised to the citizens of Hong Kong.
The U.S. Secretary of State, Mike Pompeo, says, “The Chinese Communist Party chose to crush the freedoms and autonomy of the people of Hong Kong. Because of the CCP’s actions, we are terminating or suspending three of our bilateral agreements with the territory.”