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New loophole for crypto ATMs in Hong Kong
New loophole for crypto ATMs in Hong Kong
Crypto

New loophole for crypto ATMs in Hong Kong

By Alfredo de Candia - 17 Aug 2020

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As reported yesterday by a Chinese media, individuals were arrested who pocketed Bitcoin (BTC) by circumventing the KYC (Know Your Customer) procedure of some crypto ATMs in Hong Kong, managing to withdraw about 30 thousand dollars.

In Hong Kong, Bitcoin (BTC) is considered a virtual commodity and all ICOs (Initial Coin Offerings) are compared to shares, so crypto companies must obtain a license from the SEC to operate.

Looking at the case in question, 3 individuals between 26 and 55 years old were arrested for fraud because they managed to circumvent the security systems of some crypto ATMs in the city, managing to withdraw, through 11 different transactions, as much as 30 thousand dollars, or 226 thousand Hong Kong dollars. The highest transaction was HK$54,000.

The loophole was found in all the crypto ATMs in the circuit and the superintendent of cybersecurity and technological crimes, Wilson Tam Wai-shun, said the breach was severe, although he was unable to provide further details:

“I cannot reveal what the loopholes are. But any bitcoin transaction needs verification. Maybe the ring bypassed the verifying process before taking the money”.

The two different companies managing these ATMs have not been revealed, but it is not difficult to understand who these 6 crypto ATMs belong to, since there are only 56 such ATMs in the country, which means it is enough to perform a targeted search to identify the companies.

In any case, this is a very serious problem and it puts in a bad light these tools, which are certainly useful to all those who are not accustomed to the digital world and prefer a familiar system like ATMs, which look very similar to normal ones.

It is worth noting that, for example in Malaysia, crypto ATMs are illegal and companies in the sector must have a dedicated licence to offer this type of service.

Finally, it is interesting to note how criminals wanted to withdraw fiat rather than bitcoin, meaning that they wanted to rely on a traditional payment system, despite all the risks involved.รน

Alfredo de Candia
Alfredo de Candia

Android developer for over 8 years with a dozen of developed apps, Alfredo at age 21 has climbed Mount Fuji following the saying: "He who climbs Mount Fuji once in his life is a wise man, who climbs him twice is a Crazy". Among his app we find a Japanese database, a spam and virus database, the most complete database on Anime and Manga series birthdays and a shitcoin database. Sunday Miner, Alfredo has a passion for crypto and is a fan of EOS.

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