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 236 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
Some lawmakers and industry insiders warned people of the potential investment risks associated with scams, weak consumer protection and money laundering that ATMs posed.
Legislator Johnny Ng Kit-chong said scams involving ATM cryptocurrency transfers were growing increasingly common across the world and often took two forms.
The first was through fraudulent machines that accepted cash but did not dispense any crypto, or vice versa. The second was through human actors, such as when fraudsters posed as officials or wooed targets romantically to get them to transfer cash or crypto through a fake ATM controlled by the scammers.
“Because blockchain-backed transactions are irreversible and ATMs lack robust verification, recovering these funds is nearly impossible,” Ng said.
Two operators, Coinhero and Coinunit, claim to be running Asia’s largest crypto network. A check on their websites found that Coinhero lists its transaction fees online and offers customer support via WhatsApp, email and an actual flagship store in Causeway Bay, while Coinunit’s only channel is a web contact form.
Another operator is Canada-based Localcoin. Its CEO, Tristan Fong, said the company had 30 ATMs in Hong Kong and operated consumer protection controls remotely.
“We have best-in-class, real-time on-and-off-chain transaction monitoring tools that can be deployed anywhere on earth,” he said.
Fong acknowledged the risks of money laundering and scams but noted that other financial services also faced such risks. His company monitored transactions and issued scam warnings to combat illicit activity.
Fong welcomed the city’s planned regulation and dialogue with lawmakers on rules for the sector.
“Clear rules in Hong Kong would protect consumers, raise standards across the industry, and benefit operators with the ability to implement strong and sophisticated controls,” he said.
“We look forward to reviewing the framework when it is published. We will comply fully with any new requirements.”
The South China Morning Post has reached out to Coinhero for comment.
Regulatory proposal in the works
In response to queries from the SCMP, the Financial Services and the Treasury Bureau said it was finalising legislative proposals with the SFC to regulate virtual asset dealers, including crypto ATM operators, virtual asset custodians and advisory and management service providers.
“We are now finalising the legislative proposals, with a target of introducing the relevant bill into the Legislative Council later this year,” it said.
The bureau stressed that operators should also “comply with other applicable laws and regulations in Hong Kong”.
Andrew Fei, a partner at law firm King & Wood, said that even without a dedicated virtual asset dealer licensing regime, ATM operators remained bound by the city’s existing statutes, including criminal laws.
But a specific licence would impose more robust consumer protection, know-your-customer standards, financial resources, risk management and other requirements to help ensure that crypto ATMs were operated in a safe and compliant manner, he added.
Fei said shop owners who allowed crypto ATMs on their premises appeared to have straightforward commercial motives, such as drawing foot traffic, and their legal exposure hinged on what they “reasonably suspected” or knew about the operators’ legitimacy.
“For criminal liability to attach to shop owners that merely allow the ATMs to be placed in their premises, they would need to have at least some knowledge or suspicion that the ATM operator is doing something illegal,” Fei said.
“If they don’t know or suspect anything, then I don’t think the shop owner would be criminally liable.”
He suggested that regulators establish an orderly timeline to allow existing market participants to prepare for and obtain the new virtual asset dealing licence before the regime formally comes into effect, to avoid disruption of existing client-facing activities, especially those carried out by financial institutions.
Singapore bans crypto ATMs. Other jurisdictions such as Australia allow such services, despite the government’s warning in 2025 that such machines are “one of the highest risk money laundering channels”.
Future demand and legitimacy of crypto operators
Syed Musheer Ahmed, the founder of Advisory FinStep Asia, a fintech, crypto, and virtual asset advisory firm, said customers of cryptocurrency ATMs in Hong Kong could be small-amount crypto investors, or visitors from jurisdictions where crypto trading was forbidden.
“The broader crypto exchange activities globally have come down in the past six months,” Ahmed said, noting that the retail interest for local investors could have gone down.
As of Friday, one bitcoin traded at about US$80,630.
An SCMP reporter who observed the Quarry Bay laundromat for three hours on a weekday afternoon found that not a single person used the ATM.
Fong of LocalCoin said demand for cash-to-crypto transactions had cooled in Hong Kong, with both transaction volumes and average sizes declining. But he argued ATMs were still useful for consumers seeking quick access to digital assets.
“We’ve also seen ever-growing numbers of fake crypto exchange websites,” he said. “Concerns about these websites also drive first-time crypto buyers to our machines, because their physical presence in a trusted retail location creates a high level of comfort.”
Leon Liu, a researcher at the blockchain network Tron, said the location of the ATMs was not incidental, as laundromats and claw machine arcades were typically unstaffed and opened round the clock – a business model that minimised the cost of running ATMs.
But Jack Poon, professor of practice in fintech and entrepreneurial finance at Polytechnic University, warned that unstaffed machines could be platforms for money laundering, as users had no way of knowing whether the cryptocurrency they received came from a legitimate source or illegal activity.
He also pointed to the collapse of cryptocurrency platform JPEX, which allegedly committed the city’s biggest financial fraud involving HK$1.6 billion (US$204.1 million) and more than 2,700 victims in 2023, as a cautionary precedent for what happened when an operator had no accountable presence in the city.
“A lot of people put money in there without protection. When the operator pulled the plug, a lot of people suffered,” he said. “It was very difficult for Hong Kong law enforcement or regulators to help investors recover their money because the entity was not even in Hong Kong.”
According to police, 969 cryptocurrency-related cases were recorded in the first six months of this year, with losses totalling HK$2.68 billion. Those losses amounted to 77.9 per cent of the figure in all of 2025.
The number of cases declined by 11.1 per cent to 2,234 in 2025 from a year earlier, while the figure in 2024 was 2,513, a 26.4 per cent drop from 3,415 in 2023. Losses in 2025 totalled HK$3.44 billion, down by 1.7 per cent from 2024.
Police did not record the breakdown of cases related only to crypto ATMs.