How some grey-market crypto ATMs in Hong Kong can turn users into fraud victims

Inside a tiny self-service laundromat in Quarry Bay in the east of Hong Kong Island, next to a wall of washing machines, stands a waist-high cryptocurrency terminal with signs reading “Elon Musk recommends Dogecoin” and “Buy bitcoin in one minute”.

In order to obtain Dogecoin through the ATM, customers feed Hong Kong dollar notes into a slot and scan a QR code. The equivalent amount in cryptocurrency is then credited into their digital wallet.

Such machines have proliferated across the city in recent years as interest in cryptocurrencies has risen. Many are installed at 24-hour unstaffed shops such as laundromats and claw-machine arcades.

As of 2024, the Securities and Futures Commission (SFC) found about 200 virtual asset retailers in the city, which included such ATMs.

According to Coin ATM Radar, a global geographical tracker, there are currently 234 crypto ATMs in Hong Kong – concentrated in Mong Kok, Tsim Sha Tsui, Wan Chai and Quarry Bay – offering a dozen different types of cryptocurrencies.

However, these ATMs operate in a legal grey area, with the city still in the process of setting up a regulatory regime for over-the-counter cryptocurrency trading.

Potential tools in financial scams