London Daily

Focus on the big picture.
Thursday, Oct 09, 2025

Hong Kong watchdog warns of NFT, metaverse risks as phishing scams increase

Hong Kong watchdog warns of NFT, metaverse risks as phishing scams increase

Hong Kong’s cybersecurity watchdog warns that risks involved with non-fungible tokens and the metaverse are among key security threats to watch out for in 2022.

Risks involving non-fungible tokens (NFTs) and the metaverse are among key security threats to look out for in Hong Kong in 2022, according to the government-run cybersecurity watchdog Hong Kong Computer Emergency Response Team Coordination Centre (HKCERT).

It warned that as the value of cryptocurrencies continues to climb, criminals could steal sensitive user information or access their accounts to hijack money, either at the point of transaction or where it is stored.

The HKCERT said that last year it handled 7,725 information security incidents, with 48 per cent being phishing scams, a 7 per cent increase from 2020. Phishing, a common type of online scam, occurs when someone posing as a legitimate entity tricks users into opening a link that could steal their information.

NFTs, digital assets whose ownership and uniqueness are verified by blockchains, have become mainstream around the world, with people snapping up digital artworks and cartoon avatars for millions of dollars.

The metaverse, a concept that refers to an imagined immersive virtual world where digital representations of people can interact with each other like they do in real life, also took off over the past year, driving an investment frenzy.

NFTs, which allow people to own and trade digital assets, are expected to drive the metaverse economy. Both attracted greater attention from the public as the Covid-19 pandemic supercharged the expectation that even more activities will move into the digital realm.

A vibrant community of NFT and metaverse enthusiasts have formed in Hong Kong, Asia’s financial and art trading hub, where regulators have been slow to catch up with the rapid development of cryptocurrencies. Artists are adopting cryptocurrencies to sell their artworks as NFTs, and countless cartoon avatar projects are vying for people’s money and attention.

The space also became fertile ground for fraud and scams, with victims having little recourse.

NFTs and the metaverse involve the storage of new types of virtual assets, large volumes of transactions and data exchange, whose security issues are expected to receive greater attention this year, the HKCERT said in an article published last week.

In December, popular NFT project Monkey Kingdom, founded by entrepreneurs in Hong Kong and promoted by celebrities such as JJ Lin and Steve Aoki, lost nearly US$1.3 million worth of cryptocurrencies from its community after the project’s administrator account was hacked.

So-called rug pulls, where a project’s team disappears with investors’ funds, are also common occurrences. About US$2.8 billion was lost to rug-pull scams across NFT and decentralised finance projects around the world last year, according to market data tracker Chainalysis.

In December, popular NFT project Monkey Kingdom was hacked.


It is hard for buyers to properly assess the market value of an NFT as the space is still in its infancy, said Charles To, partner at law firm Ellalan in Hong Kong. And because of the blockchain’s anonymity, it is often impossible to ascertain the identity of the counterparty, making it extremely difficult for buyers to seek recourse in case of fraud, he added.

Regulations need to strike a balance between protecting the public and hampering the growth and adoption of technologies, while regulators need to educate the public on the risks involved in trading NFTs, To said.

Last month, the HKCERT recommended a series of measures investors should take to protect their NFTs. They should always carefully verify senders’ identities and links, for instance, and consider using a combination of internet-connected crypto wallets and hardware wallets to store their NFTs.

Newsletter

Related Articles

0:00
0:00
Close
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
×