Hong Kong police bust $15M crypto laundering syndicate

Hong Kong police brought down a cross-border syndicate for laundering $15 million, roughly HK$118 million, through more than 550 stooge accounts and crypto transactions. 

They arrested 12 people, nine men and three women, aged between 20 and 40, across several districts in mainland China and Hong Kong for their involvement. Now, they’ve all been charged with conspiracy to commit money laundering.

Hong Kong officers seized over $98,000 in cash in one of their operations

Hong Kong officers found about HK$1.05 million in cash, roughly worth $134000, over 560 ATM cards, several mobile phones, and bank documents in their raids. They also discovered that the laundering team actively recruited mainland Chinese individuals to open shell bank accounts and receive proceeds from fraud cases. 

Additionally, Superintendent Shirley Kwok Ching-yee revealed that the recruits used different bank cards to take out cash. They subsequently moved it to virtual asset exchanges to be converted into cryptocurrency before it was laundered. 

The laundering team allegedly also leased an apartment in Hong Kong’s Mong Kok area to organize and execute its money laundering operations. 

Chief Inspector Lo Yuen-shan revealed the syndicate ran its operation from a Mong Kok flat since mid-2024, where mainland recruits were housed to process illicit funds through shell accounts.

She added that they caught two of the network leaders after tailing them from their flat.

They trailed one into a bank and the other withdrawing cash from an ATM before the pair left to go to a crypto exchange shop in Tsim Sha Tsui. They confiscated around HK$770,000 in cash during the operation, or about $98,000. Additional arrests came after raids in several districts in the city.

Lo claimed that over $1.2 million, roughly HK$10 million of laundered funds, were tied to 58 reported fraud cases.

Fraud-related crimes had risen by over 12% in 2024 in Hong Kong

Lately, police officers have been demanding stricter sentences against all those involved in money laundering, including those who let criminals use their bank accounts. 

Senior Inspector Tse Ka-lun of Hong Kong’s Commercial Crime Bureau argued that criminals often use their friends’ and families’ bank accounts to launder stolen funds. 

Money laundering offenders are currently up for about 14 years in jail and a HK$5 million ($640K) fine. However, for nearly two years, at least 100 people convicted of money laundering were given longer sentences, mostly additions of three to 18 months.

Nevertheless, fraud-related crimes have been surging. In 2024, fraud cases rose by over 12% since 2023, with over 10,000 people arrested. Out of the 10,000 apprehended, over 70% were shell account holders. Not to mention, all the fraud cases in 2024 represented almost half of the total 95,000 criminal cases.

The Hong Kong Securities and Futures Commission (SFC) announced new guidelines for crypto exchanges providing staking services in April. One of the new rules requires exchanges to acquire written approval before providing any services. Exchanges must also reveal all risks and information on fees, unstaking processes, outage processes, and custodial arrangements to clients. Additionally, the platforms must detail their staking activities to the SFC.

Earlier, the commission also outlined a framework to enhance market access, diversify crypto products, bolster crypto infrastructure, and build relationships with industry players. 

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