By Arthur Chan
Hong Kong, 11 August 2023: The thieves, fraudsters and other bad actors behind Hong Kong’s soaring cybercrime rate are nothing if not resourceful. As law enforcement agencies apply more manpower and cutting-edge technology to stem the tide, so do scammers find newer and increasingly sophisticated methods to cheat the public.
Love scams, investment fraud, social media cons, ransomware attacks, identify theft, phishing and banking deception are just some of the offences plaguing our online world, and these are happening with rising frequency. Artificial intelligence has exacerbated the problem. This city recorded more than 22,000 cybercrime cases last year involving losses of HK$3.2 billion, a fourfold increase over the last six years.
So, news that the Department of Justice is to set up a dedicated prosecution team to focus on cybercrime is hardly surprising but, nonetheless, welcome. The Legislative Council has already approved a request to hire a new Principal Government Counsel to lead the unit, whose remit will cover technology-based offences such as syndicated internet fraud, cyberattacks, doxxing and money laundering involving cryptocurrencies. Further, it will provide legal guidance on the use of digital evidence and make recommended changes to existing laws.
Announcing the new team, Deputy Secretary for Justice Horace Cheung was explicit about the threat posed by online criminals. “In the era of technology, internet crimes involved the complexity of cross-border criminal activities, and the use of digital evidence also gave rise to complex legal issues. Prosecuting agencies must closely follow technological advancements and stay abreast of emerging trends in technology-related criminal activities in order to effectively enforce the law,” he noted.
Forming a specialist prosecutions team for cybercrime makes sense. It will allow for more focused advocacy, make it easier to engage experts, improve the understanding and handling of technological evidence and, hopefully, speed up the judicial process. All these advances will benefit both prosecution and defence.
The development is the latest in a series of measures designed to keep law enforcement agencies better equipped to deal with the cyber criminals in our midst. Last December, the police established the Cybercrime Policing Advisory Panel, which comprises 12 tech experts including Hong Kong Science and Technology Park Chairman Sunny Chai and Cyberport CEO Peter Yan. The body shares recent developments, identifies potential threats and advises on police technologies.
In May, the police’s Cyber Security and Technology Crime Bureau launched its “CyberDefender Metaverse” platform, allowing the public to explore and gain knowledge about the metaverse – the emerging 3D-enabled digital space that uses virtual reality, augmented reality and other advanced internet technology – thus preparing for the challenges ahead in the digital age.
The platform’s effectiveness is yet to be seen but, hopefully, the number of virtual asset-related cases can be tamed. In 2022, Hong Kong recorded 2,336 virtual asset-related cases with a loss of HK$1.7 billion. In the first quarter of this year, police received 663 such cases with a total loss of HK$570 million, representing respective increases of 44% and 75% compared with the first quarter of last year. Most of these cases involved virtual asset investment, with criminals taking advantage of the public’s lack of knowledge in this field and luring them into non-existent investment activities.
While acknowledging the above steps, there is one obvious area for improvement. As our firm’s Managing Partner Alex Liu has noted, this city’s laws to combat cybercrime are badly outdated, the last review of online security having been completed more than two decades ago.
The Law Reform Commission held a consultation last year, proposing five new cybercrime offences, and its final report is due soon. It is to be hoped that the resulting legislation will be implemented swiftly and efficiently. This way, the DoJ’s new cybercrime prosecutions team and, correspondingly, defence counsel will have much clearer guidance in dealing with this modern area of law, thereby enhancing deterrence against cybercriminal activities.
Arthur Chan is a Senior Associate with BC&C. He specialises in Criminal Litigation and cyber fraud recovery claim and also develops a broad range of civil and commercial litigation such as immigration, personal injuries and employment issues. He has successfully dealt with cases involving account freezing and recovery, in one notable instance retrieving more than US$1 million that was stolen in an email scam. He can be contacted at Arthur@boasecohencollins.com.
