Hong Kong police have dismantled a crypto fraud syndicate that used counterfeit money to swindle victims.

Four individuals, including a 14-year-old, were arrested for allegedly using fake banknotes to scam victims out of HK$11 million (approximately US$1.4 million) in cryptocurrency.

Chief Inspector Lo Yuen-shan announced the arrests on July 28, bringing the total number apprehended in connection with these scams to 14 since October of the previous year.

The suspects, aged between 14 and 39, were detained on July 26 for conspiracy to defraud and possession of 5,000 counterfeit banknotes.

Victims were invited to a fake store where they were shown stacks of counterfeit HK$1,000 banknotes, with only the top and bottom notes being real.

The masterminds impersonated a well-known cryptocurrency investor to lure victims with offers exceeding current market prices for virtual currencies.

After gaining the victims' trust, the suspects convinced them to complete the transactions online, subsequently stealing their cryptocurrency after the transfer.

The police reported that the group is suspected of defrauding at least 12 victims of a total of HK$11 million from October last year to the date of arrest.

The syndicate operated with specific roles, with two identified masterminds procuring fake banknotes from a mini storage facility in Mong Kok.

Once cryptocurrency was transferred, the scammers quickly moved the assets out of the account and refused to pay victims.

Police officials warned young residents against engaging in criminal activities for quick money, especially during the summer holiday.

In Hong Kong, the production or distribution of counterfeit banknotes carries a maximum penalty of 14 years in prison.