Hong Kong investors fall prey to new scam — fake law firms that promise to recover stolen crypto

Hong Kong’s crypto market just got even more perilous.

Even as public officials launch an unprecedented public education campaign to warn investors about rogue digital assets exchanges, authorities are issuing fresh warnings about fake law firms.

Scammers are trying to con the same victims twice by impersonating lawyers who claim they can recover lost Bitcoin and other cryptocurrencies, according to the Hong Kong Monetary Authority, or HKMA.

Warning to investors

The city’s central banking institution issued a warning on May 2 against three law firms offering to assist ripped off investors.

It said the websites of Dex Law Firm, Morgan Bell Law Firm, and Watson Liddell Law Firm had listed the HKMA as a “cooperation authorization agency” or “cooperation authority” on their websites.

This is false.

“The HKMA wishes to alert the public and to clarify that it has no connection with these entities and does not work with any local or overseas law firms to refund fraud losses to members of the public,” the central bank said.

The Law Society of Hong Kong confirmed on LinkedIn the absence of these firms on its official Law List, emphasising that no such firms are registered or recognised under the stated names.

Dex Law Firm purports to be a US-based law firm specialising in fraud, including cryptocurrency. Its website mimics that of another crypto-focused law firm, even claiming its cases as its own.

It also links to supposed press clippings on sites such as The New York Times but the linked articles do not mention the company.

Dex Law Firm even says it has been recognised by several industry associations, but the law firm does not appear on their databases.

Similar tricks

The other two sites employ similar tricks.

DL News made several attempts to contact the three law firms cited by the HKMA.

An email to Watson Liddell went unanswered. Calls to both Dex Law Firm and Watson Liddell rang but went to voicemail. No one responded to DL News’ messages.

The customer service phone number for Morgan Bell was not in service.

Troubling trend

The warning highlights a troubling trend in Hong Kong, which is trying to grapple with a surge in scams and fraud.

In 2023, crypto-related fraud accounted for more than half of the US$764 million in losses in online and offline investments, according to Police Commissioner Raymond Siu.

People who have lost money to crypto scams are often left feeling like they have little recourse.

But for some, it puts them at risk of being scammed again as fraudulent companies offer to help them recover their funds.

In Hong Kong, searching for support after being scammed on Google will often result in sponsored results for scam law firms and companies offering to help people get their funds back.

And even if companies are able to trace the funds on-chain, actually recovering assets is difficult.

Quick Bites

• Hong Kong launched its first spot Bitcoin and spot Ether ETFs on April 30.
• The low trading volume has elicited mixed reactions.

Got a story about crypto scams in Hong Kong? Get in touch at callan@dlnews.com.